TAX DEDUCTIONS FOR MY BOOK
NEWS AND VIEWS:
VIEWS: TAX DEDUCTIONS FOR MY BOOK
As I am sending to many publishing agents my book proposals (suggested Title: “Islam, the West and Me: From “madrassa” to monastery”), I could deduct from my income taxes the book’s expenses, according to an advice I have just found.
(See below).
Actually, I could have deducted many years of expenses on my website, and on books, meals, taxis expenses that my newspaper didn’t refund me for.
In my planned book, the first chapter is about almost two decades in the village where I was born and grew-up. I am planning to go back to the village later this year; I should be able to deduct the visit expenses.
Also, the last chapter is on the annual Caribbean cruises during which I learned more about the West and the Westerners. I am planning to take “Queen Victoria,” one of the World’s top cruise ships, and compare it to “Queen Victoria,” the River Nile’s coal-driven paddle ship that I took when leaving my village to the outside world. I should be able to deduct the cruise expense.
Of course, I have to be careful; the advice below says: “Be careful and be honest. Claiming you bought a new boat to learn how to water-ski so that you can write about water-skiing will not cut it, but nearly everything else will fly.”
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NEWS: TAX DEDUCTIONS FOR WRITERS: PAMELA THIBODEAUX
… Unpublished or new writers may be thinking, “Oh, I’m not published so I don’t need to worry about that yet.”
Wrong. IRS rules state that you can claim a tax loss for business expenses even if you’re unpublished.
Some will say that you MUST show a profit, otherwise it is considered a hobby. Wrong! According to my tax advisor, the CPA’s I’ve talked to and those I’ve worked with, the rule states “as long as you can prove you are actively pursuing a career in writing” and as long as the expenses are considered “necessary business expenses” they are deductible…
Most writers will use a Schedule C or Profit and Loss statement to file their business tax. This form is found in your 1040 forms and instructions book or from your local IRS office. You can file a 1040 form with a Schedule C and still take standard deductions in lieu of itemizing. The “Principal Business or Professional Activity Code” (711510) is listed in your 1040 book under the Performing Arts section.
How do you prove you’re “actively pursuing a career in writing” and what are “necessary business expenses”? Here are a few examples:
1. Send letters to agents or editors. Keep a copy and staple their reply to your copy. Postage is deductible as well as return postage on your SASE. Do this via email? Print out a copy of your email query and their response.
2. Buy writing-related books (Writers Market Guide or “how to” books). These are all legitimate expenses. Office supplies (paper, ink, envelopes, business cards, etc.) are also valid expenditures. Have an office set up in your home for your writing? You may be able to write off a portion of your rent or house note and utility bills.
3. Join a writers group. Membership dues are tax deductible. Gas mileage is tax deductible when you travel to meetings or conferences even if your vehicle is normally used everyday. Meals are also tax deductible as long as the meal was business related.
4. Go to a writers conference. Conference fees, hotel expenses, gas mileage and meals are all deductible expenses even for unpublished writers.
5. Have a website? Any fees related to the creation, development and maintenance of this website are tax deductible.
6. Take vacation with your family. Combine this with a little networking by visiting the local writers group.
7. Visit the library, museum, or any other place that you could claim as research. Talk to celebrities, authors and media about your book even if it’s not published. Collect business cards as verification that this was a “working” vacation.
8. Do your children help you by doing research, proof reading, or taking on extra chores so that you have time to write? Their allowance may be deductible. You can pay for contract labor up to $600 per year without providing a 1099 and student income does not have to be reported along with the parent’s income!
9. Pay a housekeeper or babysitter so that you have time to write. All or part of this may be deductible.
10. Pay a CPA or Tax Consultant to do your taxes? Pay for an evaluation or professional critique of your work? These are considered professional fees and services and are tax deductible.
PUBLISHED A BOOK?
Here are some additional items that can be written off as expenses:
1. Promotional expenses (brochures, flyers, press kits, press releases, etc. etc.)
2. Books donated to libraries or given away for promotional purposes (sent to Oprah, swapped with another author, donated for fund raisers, etc) may be deducted at retail value.
3. Books bought for research.
4. Dry-cleaning those nice clothes you wear for speaking engagements, book signings or other author appearances.
5. Postage and/or shipping fees for books sent to wholesalers, retailers, readers, reviewers, etc.
6. Agent fees and commissions.
7. Self-Published or E-published and have to buy copies of your book to resale? Set up costs, cover art, and the charge for producing (or buying) the books are tax deductible!
Remember, if it falls under “Necessary Business Expense” it is deductible!
Worried about being audited? Don’t.
Be careful and be honest. Claiming you bought a new boat to learn how to water-ski so that you can write about water-skiing will not cut it, but nearly everything else will fly.
Most important: good record keeping.
It’s never too early or too late to get organized for tax season. Remember, tax laws change yearly. For more information visit the IRS website @ www.irs.gov.
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Pamela S. Thibodeaux is a member of Bayou Writers Group and ACRW (American Christian Romance Writers). Her writing has been tagged as “Inspirational with an Edge!”
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