Tax Tips for Writers and Authors

Spring is in the air, and that means it’s tax season once again. I’m not a tax expert, so I’m not purporting to be giving any kind of legal advice, but the one thing I have learned, through trial and error, is to save those receipts. Come April 15, it’s far better to have your tax preparer tell you that you can throw a receipt away because you don’t need it, instead of having him or her tell you that you won’t be able to claim a deduction you would otherwise be entitled to because you don’t have your receipt.

Generally speaking, if it’s an expense incurred in writing, publishing or promoting your books, you can deduct it. Your tax preparer will ultimately determine what deductions you will be able to take, but they will probably want to see your documentation first. Therefore, you should keep your receipts for:

  • advertising expenses
  • book design services
  • book reviewers, (if you had to pay for a review)
  • editing services
  • photographers and illustrators
  • publishing services
  • research materials

Does your publisher charge you for your copies of your books? If so, hang on to the receipts.

Other expenses that may be deductible would include:

  • Book signing materials, including tables and chairs, tablecloths, display materials and signage
  • Cellphones, (if purchased for business use)
  • Computer hardware and software
  • Office supplies
  • Postage and shipping services, such as UPS

Do you work out of your home? If so, a portion of your rent or mortgage, and utility bills, may be deductible. Keep the receipts.

Some authors, including yours truly, write genre books that sometimes require special attire for book signings. For example, I write Old West historical fiction, and some of the Old West venues where I sign my books require me to wear period clothing. Again, whenever I buy any period outfit or accessory, I keep the receipts, because it may be tax deductible.

Many authors also have book related travel expenses. Whether it’s across town or across the country, you need to keep track of your travel expenses, as they too may be deductible. These expenses would include:

  • Air fare
  • Gasoline
  • Hotels and lodging
  • Meals
  • Rental cars
  • Taxi fare

Business mileage is anther potential tax deduction that many us of tend to forget about. You can document your mileage by either keeping a log book in your car, or via websites like Google Maps or Yahoo Maps. Simply enter your address and the address of your destination, and the exact mileage will display at the top of the page. Print out the page and put it in your tax files.

Remember too that authors and writers are not immune to tax audits. You should keep your final return, as well as all of your documentation, including receipts, on file for six years. Rest assured, if you’re ever audited, you will most certainly have to have your receipts. If you don’t the IRS will, more than likely, not only disallow the deduction, they may also hit you with a big penalty as well. It’s far better to have those receipts and not need them then the other way around.

My tip for the day.