A new tax deduction for authors and bloggers in 2018!

January 16th, 2019 → 9:07 am @

taxes_money_rolls_Large

 

Congratulations authors and bloggers! There is a new tax deduction that you are (probably) entitled to take on your 2018 tax return!

 

It’s called the Qualified Business Income (QBI) Deduction.

The tax deduction is equal to 20% of your profit from a “qualified business.”

¬†Writing, blogging and self publishing are all “qualified businesses” if operated as anything except a C corporation (most authors and bloggers are sole proprietorships and not C corporations).

Law, accounting, performing arts and consulting, health and financial services and a few more professions are not “qualified businesses,” so consult your tax professional if you operate any of those business.

If your taxable income is less than $157,500 for a single person or $315,000 for married filing joint, you can claim the 20% QBI tax deduction (even if you operate one of the “not qualified” business)! If your income is more than those thresholds, your credit will be phased out.

There are some additional restrictions and complications, especially if you are an S Corp, pay wages, or have several businesses. So consult your tax professional.

 

The Qualified Business Income Deduction is found on Line 9 of the 2018 Form 1040. so look for it!

Your tax prep software may not calculate the deduction automatically; you may have to answer some questions to trigger the deduction.

2018 Form 1040 Line 9 QBI

For more tips on taxes for writers (and bloggers) order my book¬† Business Tips and Taxes for Writers. It’s been updated for 2018.

Business Tips and Taxes for Writers Update 2018

 

Carol Topp, CPA


Tags: , , ,

Comments are closed.