The writing business is like any other business, which means you get the advantage of business-related tax breaks.
If you are a writer and are netting money from your writing (or are at least honing your craft and grinding to earn money from it), you can deduct supplies connected to your writing enterprise.
Advertising, marketing and promotional costs. Advertisements, banners, bookmarks, business cards, flyers, and websites that function as advertisements.
Book-launch and/or book-signing event expenses.
Car expenses. It is crucial to use an agenda, logbook, mileage journal, or software to track your mileage. The IRS necessitates the records be kept concertedly. Therefore, estimates are not permitted; there must be tangible mileage accounts.
Computer. A sundry of independent individuals click and tap on their computers privately as well as professionally, thus it is imperative to log the percent of business versus private use. Writers subsequently implement the ratio of work-related use to the amount and functioning incidentals, and apply the calculation as a base for their deduction.
Contract labor. Editors, graphic designers, proofreaders, web designers, or any individuals you employ as an independent contractor.
Domain name costs.
Entertainment. Be realistic.
Furniture / Equipment. Old stuff? Absolutely! You can deduct that timeworn stuff you’ve had since way back in the day. How? You deduct the lesser of its price or its reasonable market worth.
Home Office. You can deduct a home office if you operate the area exclusively and as your primary place of business. The zone cannot be used for private activities, it must be used entirely for writing tasks. The expanse does not have to be a widespread area, any area with a computer and a desk can indeed be used as an office. Please note, you cannot have another space outside of your home for your writing projects. Hence, several writers dread that the home office is a red flag. Be mindful, as long as you respect the guidelines, you don’t have anything to fear. How do I gauge my home office space? Measure the square footage of your home office, then divide that sum by the total square footage of your home. Apply that calculation to home maintenance, homeowner’s or renter’s insurance, mortgage and rent fees, property assessments, repairs, and utilities.
Insurance. Business, home, medical, and renter’s.
Log business-related calls.
Meals. Business Breakfasts, Lunches and Dinners.
Merchant charges. The IRS does permit merchant fees (PayPal or shopping cart fees) to be included in expense of commodities sold.
Research materials. Amazon Prime, books, comics, Hulu, magazines, Netflix, and newspapers.
Supplies. Folders, highlighters, markers, notebooks, paper, paper clips, pencils, pens, postage, printing costs, software, and other writing materials.
Writing Association Fees.
Writing Group Dues.
Keep an independent checking account for transactions related to writing. It is critical to remember that if you claim your writing as a profession, the IRS anticipates you to begin making dough eventually or else is it considered a hobby.
In a nutshell, the significance to calculating tax deductions for writing-related business expenditures is to keep meticulous receipts and records for everything. Just in case you are ever audited, you’ll have the documentation to back it up. However, if you are uncertain, please confer with a professional tax preparer.
© 2018 Diane Morasco