The Writer’s Block: TAXES–An Inevitable Part of the Business of Writing

Benjamin Franklin said only two things are certain in life: death and taxes. For aspiring writers and published authors alike, taxes can be a side of the business of writing that confuses and frustrates. There are so many questions:

• Can you use your writing as a write-off if you haven’t sold anything yet?

• Do the “Hobby Laws” apply to writing?

• As an author, what is and isn’t allowable to claim as a deduction?

• Can I claim part of my mortgage if I have a home office I use for writing?

• Are there any new changes to the tax-code affecting authors?

If you ask a dozen writers these questions, you will get a dozen different answers. That’s because you shouldn’t ask other writers, you should use these questions to interview your potential tax advisor. On the other hand, you can check with writers you know to see if they are happy with their tax advisor.

In 2023, I had two books traditionally published. It was the first time I’d earned an income from writing—and not my editing business. I can tell you, no matter who does your taxes, it is important to keep good records throughout the year. And a shoe box full of receipts does not qualify. Here are three other things I did that helped:

1. Keep income from sales in a specific account. This made it easy to tabulate my income

as a writer. Add my royalties to the deposits I made from hand sales and done! It also

made paying sales tax easier. (Oh, yes. When you sell your book at events, you are

responsible for sales tax.)

2. Expenses come out of a specific account not our personal account. The mingling of

funds makes it more difficult to track expenses. Now, I had the benefit of having an

income from my editing. Most writers will need to deposit an initial investment into the

business.

3. Used a tax advisor familiar with working with home businesses and being self-

employed. My tax agent had done the schedule C for my editing business for years. He

was also well informed about what is allowable for writers. His company will represent

me for free during an audit. To me, this is well, worth the fee of having an expert do the

job.

I am a writer. I love writing; I hate paperwork! That’s a problem when you are running a

business. Like many writers, I didn’t want to think of my writing as a business. Still, if you want to make an income from it, you must treat it as a business. You are self-employed. Here are areas I struggled with:

1. Have a specific credit card you use for your business. When you can’t pay for an

expense related to your writing from your writing account, put it on a credit card that you do not use for anything else to keep your records simple. Make sure to pay it off every month to avoid interest charges.

2. Keep a little notebook in your car to track mileage. Record any errands you do that are related to your writing business. It really does add up.

3. Keep a list of all your expenses throughout the year. That way you’ll be better

prepared come tax season.

4. Eventually, you’ll need to show an income. Not necessarily a profit, but some amount

of income. There are many ways to earn a little money in the field other than paid

publications. I will discuss some of them in June’s newsletter.