It's tax time here in the US and because I'm a true blue American, I have a good, healthy fear of the I.R.S. When filing my income taxes, I include my W-2s but I also include my Amazon 1099-MISC. That's fancy tax form talk for the form Amazon sends me (and sends the IRS!) that says how much money I made in royalties from my books, which is taxable income. I just LOVE LOVE LOVE the IRS, in case they're listening.
This is also the time of year indies will get a bunch of blurry advice about claiming writing expenses on their taxes. Well it's good you're reading this article because I'm about to save you a LOT of time.
You probably don't want to claim any of those itemized deductions. Any of them. Zilch. Zero. Unless your total deductions are going to be more than your standard deduction ($6200, for a single person like myself), you're just losing money. That's because it's an either/or situation. You can EITHER take itemized deductions OR the standard deduction. Not both.
Once I realized I could EITHER get a deduction of $600 OR $6200, the decision was fairly easy.
If you're a person who already has over six grand in deductions, then you probably do want to add as many items as legitimate business expenses as you can. Build that candy mountain, people.
But beware. Keep it accurate, have receipts to prove your word, and never for one moment stop fearing the IRS.
Different writers will have different expenses. Listed below are things you can safely claim as legitimate expenses:
Proofreading fees
Editing fees
Book cover art fees
Promotional fees
Ads for your books
Ads for your book signings
Cost of all freebie items you gave away
Cost of renting area for book signings
Costs for any food/beverages you gave at these
Your transportation costs to signings and back
Writing classes or events you paid to attend
Transportation costs to get there and back
If you had hotel costs for above, claim them
Website yearly fee
Domain yearly fee
P.O. Box monthly fee if used just for your books
Fees to enter book contests
Cost to buy and ship your book to said contests
Office supplies (keep it honest & keep receipts)
Books you purchased to improve your writing
or how to market your product better
Books you purchased as research for your books
Yes, include cost you paid for shipping
Business lunches, if you had them.
There are other, blurrier items:
What about WiFi cost? You probably use this for your writing and promoting all the time. Be careful. Calculate the % of WiFi you actually use for book related stuff. I was going to claim 10%.
What about purchases like laptops, Chromebooks, etc? Figure out how many years the item will last. If it's three, then claim one third the amount you paid, and be sure to keep the receipts.
Technically, you can claim an amount for a Home Office. If you have an area you use only for writing, you can claim $5 per square foot, up to $1500. Technically. It's my opinion this is a fuzzy area and not one I'm willing to be cute on for the mere $80 it would give me.
Remember, the IRS hates cute.
There you have it! If you already have expenses greater than the standard deduction, definitely claim all your legit writing-related ones. If it's better for you to take the standard deduction, then you're just going to have to make your fortune by selling books.
And keeping your day job.
Amie Ryan is the author of essay collections GREEN SHOES MEAN I LOVE YOU, STARFISH ON THURSDAY, and the Marilyn Monroe biography MARILYN: LOVED BY YOU. Learn more at www.amieryan.com
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