Wednesday, October 26, 2016

Taxes


Image result for tax time 

“What are the things that independent writers most commonly overlook when tax time comes?” This is a question posed in the February, 2016 issue of Writer’s Digest. Bonnie Lee, author of Taxpertise for the Creative Mind: Murder, Mayhem, Romance, Comedy and Tax Tips for Artists of All Kinds, (how’s that for a title?) offers these tips.



Lee claims that “Writers who are in the profession of writing (and not just as a hobby) can deduct all expenses incurred during the year, whether they sell their work or not.” Unfortunately, many writers and some tax professionals do not know this.

Deductions include: travel expenses to conduct interviews, expenses for meals away from home during these trips, research expenses, phone expenses, office supplies, a new computer, home office expenses. The Uniform Capitalization Rules (not claiming expenses until the book is sold, or capitalizing the expenses as “start-up expenses’ over a period of five years) does not apply to writers. Expenses can be deducted as they are incurred. Also, a home office deduction is allowed a taxpayer to the tune of $5 per square foot up to $1500 (or 300 square feet of office space.

Good documentation is the key to audit-proof taxes. Cancelled checks, credit card statements, even emails and photographs are good records to keep regarding writing expenses.

The February 2016 issue of Writer’s Digest is devoted to the business side of writing.

I don’t keep great records, I hope you do. Hey, there’s a New Year’s Resolution right there.
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