Taxes For Creative Writers: What Expenses Can You Write Off?

by | Law For Writers, Organization Techniques For Writers | 10 comments

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Deadline: Thursday, April 18th

creative writers, taxesIt’s tax time again—and Uncle Sam is breaking out his museum-quality archival gloves and prepping his list of people to audit. And while we’re not accountants, we thought we could offer a few tips and answer some pressing questions about how creative writers can prepare their taxes.

Let’s start with the big question first.

When is a creative writer allowed to write off his or her writing expenses?

There’s one key question to ask yourself that will help you determine whether or not you can write off your expenses, whether from self-publishing a novel or buying books of poetry: Are you writing to start or maintain a business, or are you writing as a hobby?

The difference (for the government, anyway) comes down to one word: Profit. If you’re writing with the intention of turning a profit (starting a business), then you’re allowed to write off your expenses. If you’re writing because you enjoy it, but you’re not making a focused effort at turning a profit and you never expect to, then the government doesn’t want you to write off your writing expenses.

The key for writers is to have a strong, provable case that demonstrates writing as a business as opposed to writing for fun. But it’s a fine line, isn’t it?

A writer may write for years without turning a profit, almost as a kind of apprentice in the trade, until the writing becomes profitable later on. Be sure you have a good accountant to help you make these kinds of decisions (and to back you up if you get audited).

For the record, we at Writer’s Relief think this policy is lame. Here’s why: We’ve never met a poet who planned to make a living writing poetry. It’s pretty much not possible. And we would like to see a government that encourages art for art’s sake, as well as art for profit’s sake. We can always hope.

Do I have to make a profit on my creative writing before I can write off my expenses?

Generally speaking, getting paid goes a long way toward having credibility as a formal business entity. But it’s not necessary. Businesses lose money all the time. And some businesses will exist for years before turning a profit. Look at Amazon (which went online in 1995 but didn’t turn a profit until 2001).

Just be sure that your situation is airtight and provable—that you can show you’re not just writing for kicks and that you hope to start a business.

What kinds of things can a writer write off?

Books, office supplies, research tools, home electronics, website creation and maintenance costs, promotional materials, travel, food, gifts, fees for services…the business of being a writer often requires the same kind of infrastructure as any other entrepreneurial business. Some writers will even write off their home offices (though this can get tricky because home office write-offs are sometimes based on the percentage of space occupied by the office in a home).

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What if I get audited?

One word: Doc-u-men-ta-tion!

The key is being organized. Demonstrating a serious focus and level of organization about your professional paperwork can go a long way toward showing the IRS that you’re not a hobbyist who keeps his or her receipts crumpled up in a desk drawer. Also, being organized will help you track your write-offs in an effective way.

Some tips: Keep your writing receipts and expenses separate from your personal expenses. Reserve a file for your business accounting. Keep a separate bank account and/or credit card for your business. Not only will it help if you’re trying to make the case that you’re a legit business, but it will keep you organized too.

Can Writer’s Relief do my accounting? You do so much other paperwork for writers.

We help creative writers target their submissions to literary agents and editors of literary journals. We know the ropes when it comes to publishing books, stories, essays, and poems. But, alas, we’re not accountants.

That said, our Full Service clients do have the option of receiving a yearly tax report, aggregating any monies spent using our services, so that they can talk with their accountants about whether or not it would be appropriate to write off the expenses.

Writer QuestionsQUESTION: Will you write off your creative writing expenses this year?

10 Comments

  1. Lola

    Great tips and advice. Tax stuff is so confusing! I’ll try being more organized this year so I can document everything for my accountant for next year 😉

    Reply
  2. Gypsy Rose

    YES awesome! U guys r the best! :o)

    Reply
  3. Stephanie

    This is a super great post! Thanks for the heads up, WR!

    Reply
  4. Terry

    Good timely post and advice. But a little clarification on meals: most meals are NOT deductible, unless included as part of a package plan, such as a conference, and of the remaining meals that are potentially deductible, only 50% of that expense is deductible. You may also have to prove that you were out of town either overnight, or so far away that you could not reasonably expect to return home and have a meal there. (This came straight to me from several different accountants.)

    Reply
    • Writers Relief Staff

      Terry, Great additional info. Yes, some expenses are deducted as percentages. Also, laws vary by state. A good accountant is key for creative writers!

      Thanks for your comment!

      Reply
  5. Jim

    If you show an effort to make a profit, you’re probably okay. WR expenses are a good way to do that.

    Reply
  6. Cheryl Johnston

    Thanks for this solid advice – helpful and clear.

    Reply
  7. Debora

    It’s early in the morning and I’m just working on my first cup of tea, but if I remember right, my accountant said you can actually show a loss for three years, then must show profit in the next year to keep yourself recognized as a business. But again – document everything.
    Great article, good comments. Thanks, all.

    Reply
  8. Tallie

    Excellent post. You provide some great advice on what a writer, or any business entity, can deduct. If anyone is looking for more insight on how to deduct business meals, we recently wrote a piece ourselves that is relevant to your advice. Check it out and let us know what you think. Thank you for your post. https://blog.usetallie.com/deducting-your-businesss-entertainment-expenses/

    Reply

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