Bookkeeping is an essential part of the business of writing. Determining what you can claim as a business expense and how to substantiate those deductions require an understanding of the Federal tax code.
Some common direct expenses for writers are listed below along with tips on how to make them deductible.
Common Direct Expenses for Writers
Advertising, Marketing, and Promotion
Ads in a newspaper, magazine, or on the radio promote your business. Advertising can include being a sponsor for a community or national event. Pens with your company logo can be considered advertising. Business cards, brochures and flyers are other advertising mediums to consider. Writers may also have expenses to exhibit or display their product. These fees may also be deducted.
Bank Charges
The fees that the bank pulls out of your business checking account are usually business expenses. This could include per check processing and per deposit recording fees as well as monthly service charges. They also include fees for a check that bounced or overdraft protection fees. For this to be 100% deductible, the checking account must only be used for your business.
Education and Training
Conferences or conventions on writing, workshops to enhance your writing skills, DVDs you rent and watch for educational purposes, and classes you attend to learn more about a topic related to writing are all ways to benefit from this tax deductible expense. If you take correspondence courses, attend a college class or seminar specific to your industry, the tuition, registration fees, and in most cases your textbooks and supplies can be taken as a business expense.
Furniture
Your office desk, chair, file cabinets, tables, and bookcases for use or storage related to your business can all be deductible in some way.
Gifts
Each year writers can purchase gifts for people related to their writing business such as printers, publishers, agents, clients, and interviewers. You may purchase the gift in any dollar amount, but only $25.00 of the gift is tax deductible. This is limited to $25.00 per person per year and the person must be connected to your business in some way for even the $25.00 to be deductible. This limit may be changed by the IRS at any time.
Licenses, Dues, and Membership Fees
Licenses may be required by your town or state to operate a business in a home. The cost of your business license can be deducted as a business expense. Dues that you pay to local writing groups or organizations can also be considered deductible. Professional writers may belong to national writing groups who charge fees for membership or online forums for writers. As long as the organization or agency is related to your writing business, the membership fees can be deductible.
Postage and Shipping
Fees paid for stamps at the post office to mail a proposal, shipping fees paid to UPS, Federal Express, DHL, or any of the other carriers to transport something related to your business is deductible. The rental fee for postage meters can be deductible. The amount you pay to a delivery service to bring mail from your post office box to your home office can also be a deductible expense.
© Brigitte A. Thompson, Datamaster Accounting Services, LLC
The information provided is intended to be general and based on the Federal Tax laws of the United States. As such, it is subject to change. This information is not intended to be used as a substitute for financial or legal advice. Be sure to consult your tax advisor on all tax matters.