Tax Tips for Authors and Writers

The holidays are over, which means it’s time to start preparing for tax season. I want to begin by stating for the record that I am not a tax expert, nor am I giving any kind of legal advice. However, one thing I have learned, through trial and error, is to save my receipts. Come April 15, it’s far better to have your tax preparer say you can throw a receipt away because you don’t need it, rather than hearing him or her tell you that you won’t be able to claim a deduction because you didn’t have your receipt.

Generally speaking, if it’s an expense incurred in writing, publishing or promoting your books, it may be tax deductible. Your tax preparer will ultimately determine which, if any, deductions you are allowed to take. However, he or she will want to see your documentation. 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 copies of your books? If so, hang on to the receipts.

Other potential deductions

Other expenses which may possibly be deductible would include:

  • Book signing materials, such as tablecloths, display items and signage
  • Cell Phones, (if purchased for business use)
  • Computer hardware and software, (if purchased for business use)
  • Office supplies
  • Postage and shipping services, such as UPS
  • Website hosting

Do you work out of your home? If so, a portion of your rent or mortgage payments, and utility bills, may also be deductible. Save those receipts.
Some authors, including yours truly, write genre books which may require special attire for book signings. For example, I wrote a series of  Old West novelettes, and some of the venues where I signed my books required me to wear western clothing. If I had to buy a special outfit or accessory for a book signing, I kept the receipts.

Travel expenses

Some authors have book related travel expenses. This would include travel for book signings, research or business meetings. 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:

  • Airfare
  • Hotels and lodging
  • Meals
  • Rental cars
  • Uber or cab fare

Business mileage is another tax deduction many us may forget about. You can document your mileage by either keeping a logbook in your car, or via websites like Google Maps. Simply enter your address, and the address of your destination, and the exact mileage will display on the page. Print out the page, highlight the miles, and put it in your tax files.

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

Is it a business or a hobby?

This is where things can get a little sticky. As authors, we tend to take our work seriously. For us, writing books is most certainly a business. However, the IRS may see it differently. 

As I mentioned in my article, The Author Myth, found at the top of this blog, there is a common misconception that authors make a lot of money selling their books, and some do. However, as also stated in the article, “For most authors, book royalties are an income supplement at best. For many, they’re not much more than beer money.” There is a limit as to how many years you may be allowed to write off your deductions if you’re not making a profit. After that, the IRS considers it a hobby, not a business, even though we may see it differently. Of course, the IRS still requires you report your book sales or royalties as income, even if it was only a few dollars.

For more specific information regarding taxes, and which deductions you may be entitled to take, please consult with a professional tax preparer, or the Internal Revenue Service.

Gayle Martin

From the Writer’s Desk is written, edited, and maintained by a real human being. It does not include content generated by AI (Artificial Intelligence) software of any kind.

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