Tax Deductions for Writing

I think expenses such as postage for sending manuscripts, paper, ink for printing out your manuscripts, professional associations such as writers group or writing conferences, traveling to and from such meetings and the housing and meals. I believe reference books (books of literary agents, etc.) are deductible.

I believe there's a thread relating to this elsewhere in AW. I'll see if I can find it.

I'm so sorry to hear about your husband.

"Taxes for Writers" thread is http://www.absolutewrite.com/forums/showthread.php?t=121355&highlight=deductions started by Fillanzea.

This might help you get started.

I hope your agent did NOT send you a form W-2. They should have sent you a form 1099-MISC. A W-2 is for employees of a business, and you are not an employee, you are your own business.

Your income and expenses for writing are reported on schedule C, which is a part of your regular form 1040. The expenses listed previously in this thread are all appropriate. Also cab/subway/bus fares. Make sure you keep the meals separate from other expenses (such as travel) because only half your meals are deductible. If you had to purchase any equipment, like a new computer or printer, those can be fully deductible. If your schedule C shows a profit of more than $400, make sure you fill out schedule SE. That is self-employment tax (comparable to social security tax) on your writing income.

If you have specific items you are not sure about, post here, or feel free to PM me.

MM

If I deduct my writing expenses, does that mean my husband and I can't file jointly? I have no income from writing and this year will only have disability/Social Security income. Unless someone suddenly gives me a huge advance (and that'll happen when my pomeranian takes wing and flies north every summer). If we finle jointly and I have all the deductions, does that count?

jodiodi said:

If I deduct my writing expenses, does that mean my husband and I can't file jointly? . . .

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No, it does not mean that. You can file a Schedule C for your own business as part of a joint income tax return. I do, and have done so for years.

Be sure to look into the issues revolving around business expenses and profit-loss reporting. Sooner or later (within a few years) you have to show a profit or you will have some 'splainin' to do. Start here, for example.

--Ken

If you're serious about writing as a career and have a home office, don't forget the home office deduction.

Contrary to what many believe, a home office deduction is NOT a red flag to the IRS for writers -- because with very few exceptions we do all our work from home.

CheshireCat said:

If you're serious about writing as a career and have a home office, don't forget the home office deduction.

Contrary to what many believe, a home office deduction is NOT a red flag to the IRS for writers -- because with very few exceptions we do all our work from home.

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Maybe. But reputedely it is an audit flag for everyone who claims it (obviously few are audited, but it raises the risk). The taxpayer had better have abundant documentation and a legitimate claim. It's a high bar, as the space has to be devoted exclusively to the business.

--Ken

I have been doing income taxes since 1974. I have never had a client of mine, or even heard of a client of someone else's being audited because of the home office deduction. And I know a lot of CPAs. If you are entitled, take the deduction. Just make sure you abide by the prime directive: exclusive use. It has to be a work space, and only a work space. That does not mean it cannot be comfortably furnished, but it does mean it cannot double as the guest room or the crafts room or the room where your kids have their model train set up or the room with the boxes of Christmas decorations piled in the corner.

And people, keep records! Keep a mileage log if you are driving. Keep receipts for anything you plan to deduct. Remember that a lot of those newer thermographic receipts fade to nothing over time. Hitting the deductible item on a receipt with a highlighter helps. Or make a photocopy of the receipt before it fades. The IRS has 7 years from the time you file your return to ask you questions. Here in the desert southwest, those receipts will be little blank slips of paper. If the receipt does not indicate what it is for: write on the receipt with a ballpoint pen. If an item might be questionable, make a note at the time as to why you bought the whatever and why it was a business expense. And don't get crazy or greedy. Pigs get fat, hogs get slaughtered.

MM

Does keeping a mileage log work for filing for all kinds of businesses, even contract work? (I'm just curious, because if the answer is yes, then I could have done this and started charging the government for my gas).

Can a home office be a portion of a room? My house has a very open floor-plan. The home office is clearly its own space, but it's only about 1/3 of the room. Can I measure the square footage and deduct accordingly?

RodS said:

Does keeping a mileage log work for filing for all kinds of businesses, even contract work? (I'm just curious, because if the answer is yes, then I could have done this and started charging the government for my gas).

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Only if you are self-employed (a freelance). And commuting miles (going back and forth to the same location each work day) do not count. Usually you cannot charge back the person/organization paying you for your expenses, unless that is in your original agreement.

Wordwrestler said:

Can a home office be a portion of a room? My house has a very open floor-plan. The home office is clearly its own space, but it's only about 1/3 of the room. Can I measure the square footage and deduct accordingly?

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Interesting question, and frankly I don't know. My gut reaction, which is mostly right, is not. I know you can't divide a clearly single room into business and non-business portions. Either the whole room is, or it isn't.

MM

Something else I was told by a tax specialist is that you can have, in your office, anything that would fit into an executive office. So, for instance, I have a couch and chair in here. A fireplace. I have custom-built bookcases and this desk, some very nice rugs, and a large flat-screen TV.

Because I was able to design this house, I made sure to take several steps to define this space as my workspace, including having a separate entrance (porch, steps, and all). It's obvious walking into this space that it's a workspace, because I have a HUGE desk and credenza, I have file drawers, I have research books, a dedicated office phone, and so on. But I spend a LOT of time in here when I'm writing, and I need to be comfortable. So.

I have a separate living room with a couch and chairs and a fireplace. I have other TVs in the house. I have other rugs.

This is where I write. I also occasionally write upstairs on my laptop, but I don't consider that square footage when taking the home office deduction.

I file my taxes as a sole proprietorship, and this is my business address.

My advice is to always consult a tax specialist if you have questions. But I'd also advise anyone to explain their situation carefully to said specialist, because many will have to do some homework to learn more about writers and how the IRS views them before they can offer anything but the most ultra-conservative advice.