What CAN you write off on your taxes…and HOW?
February 3rd, 2023 → 7:34 am @ Carol
Hello! I’m curious as to what’s the process for writing off materials that you’ve purchased specifically for writing your book. Are there categories that apply (computers, software) and some that don’t (research?)? What’s the step to identify those on taxes and do I need to set up an LLC to do it?
Thanks,
Scott
Scott,
If you sign up for my email list you’ll get my blog posts emailed to you (in a summary form) and get a list of tax deductions for writers. Go to TaxesForWriters.com and sign up in the lower right corner.
Then read some of the blog posts and articles on TaxesForWriters.com and click on my Tax Prep Helps page.
There you’ll find a few short articles and probably most helpful, my Small Business Expenses Form https://caroltoppcpa.com/resources/Small+BusinessExpensesForm.pdf
It’s a simple form I created for my tax clients to collect all their business expenses for tax preparation.
As for HOW to deduct your expenses, I explain all that in detail in my book, Business Tips and Taxes for Writers. It’s a lot to go into, more than a blog post can answer, so that’s why I wrote the book! You can order a paperback or pdf version for $14.95. Order here.
Hope that helps,
Carol Topp, CPA
Alice Williams
13 years ago
Hi Carol!
A good friend of mine is a freelance writer who has been published on various magazines and websites. She is also an aspiring author and poet.
Any book deal which gave her a decent sized advance for the sort of thing she writes would tip her (a little way) over the limit on untaxed earnings for this financial year.
Purely in financial terms, would accepting such a book deal help or hurt her?
Thanks if you have a simple answer, no worries if there isn’t one!
Regards,
~Alice Williams
Carol
13 years ago
Alice,
Book deals are always worth it! 🙂
If your friend is only a little over into a new tax bracket, then she’ll only pay a little bit in income tax. We in the US have a tiered income tax. Sort of like a wedding cake. If you are in the 15% tax bracket then some of your income is not taxed, some taxed at 10% and only the top part taxed at 15%.
I don’t know the details of your friend’s financial situation, but it sounds like she should accept any book deal she gets. Advise her to keep good records and take every tax deduction she is entitled to take.
My book Business Tips and Taxes for Writers will be a bog help to her (and a tax deduction!)
Carol Topp, CPA
Alice Williams
13 years ago
Thanks Carol, that’s really useful advice. I’ll definitely have a look at your book, it sounds like exactly the kind of advice she’s looking for.
Regards,
~Alice Williams
Alison Naomi Holt
12 years ago
Hi Carol. I just tried to contact you with the contact form on your website, and I tried probably ten times to put the captcha letter in, each time double checking for correctness, and each time it was rejected. I think you may have a glitch on your contact page. Anyway, here’s the question I was trying to ask:
I just read your interview on the sisters in crime website. I have a question that I’ve never seen answered anywhere. I write usually 6-8 hours/day in a coffee shop. Are my meals there and/or my coffee or tea I drink at all tax deductible?
Thanks,
Alison Holt
http://www.alisonholtbooks.com
Carol
12 years ago
Allison, So sorry for the Captcha glitch. I hate those, but they are a necessary evil to keep spammers away.
I’ll see if I can find an easier way for people to email me.
Meals are deductible while you are traveling away from your tax home (meaning the city where your business is located) or if you are entertaining a client or customer. Only 50% of the cost of meals is deductible.
What you described is a personal expense and not a tax deduction. Sorry…
Carol Topp, CPA
Alison Naomi Holt
12 years ago
Well, it’s not a lot of money but it all adds up. The good news is I can throw away all those darn receipts for coffee! Thanks for answering so promptly.
Alison Naomi Holt
http://www.alisonholtbooks.com
Kelly
12 years ago
Quick question: What is the “business description” of self-publishing? Also, are computers tax-deductible?
Carol
12 years ago
Kelly,
The IRS uses the North American Industry Classification System (NAICS) to assign a code to your business activity. 511130 is the code for Book Publishers.
Computers are tax deductible. For a full list of tax deductions common to writers, sign up for my email list (you’ll get my blog posts emailed to you) here: https://taxesforwriters.com/ in the lower right corner.
Carol Topp, CPA