Wednesday, January 28, 2015

Tax Deductions for Writers by Donna Goodrich

Whether we like it or not, it's that time of year again when we need to gather up those receipts and deposits that prove our writing expenses and income. Today, author Donna Goodrich gives us a list of various allowances available for writers. -- Sandy

DonnaAs a writer, you’re considered a self-employed person, and thus you will have to show all your income on a Schedule C. However, to offset this income, you can take the following deductions. NOTE: Even if you have a CPA or other professional prepare your taxes, it’s up to you to keep good records using Quicken or another program that works for you.

  • Advertising (business cards, brochures, fliers)
  • Bad debts (if someone has owed you for more than two years, and you can show proofof trying to collect it.
  • Car expenses (can take actual expenses prorated, or mileage deduction allowed by IRS. Keep track of all your miles—anything connected with writing.
  • Commissions—agent, etc..
  • Depreciation—office equipment that cost over $100 and is expected to last over a year. (This can be taken over several years or all the first year.)
  • Insurance—on rented office; or if you have an office in the home, you can take a portion of theinsurance.
  • Interest—credit card used solely for your business, i.e., office supply store or airline.
  • Legal & professional expenses—portion of tax preparation re: self-employment; if you pay someone to look over a contract, or to try to collect money owed you.
  • Office expense—anything you do to your office, i.e., decorating, repairs (carpet, drapes), etc.
  • Rent or lease—business equipment. However; if you end up buying the equipment then you may have to go back to the first year and show depreciation for the time you had it.
  • Repairs and maintenance—repairs on your equipment, or a maintenance agreement.
  • Supplies—office supplies (buy two sets—one for business, one for household).
  • Taxes and licenses—related to your business.
  • Travel—plane tickets, rental cars, cab fares, parking fees, tolls, etc.
  • Meals and entertainment—taking a writer to dinner, baseball game, concert, etc., or your own meals if you stay overnight.
  • Utilities—for a rented office, or if you have an office in your home, you can prorate your utilities.

(The above deductions are placed line by line on your Schedule C. Those listed below are miscellaneous deductions that go on Part V—Other Expenses. You may have more. These are just some I deduct every year.)

  • Postage
  • Telephone (landline only if you have a separate business line. Otherwise, you can deduct such things as Call Waiting, conference calls, long distance calls, cell phone [prorated] and don’t forget your Internet fees.)
  • Books and publications—magazines you buy at newsstands or subscribe to for possible markets, or a newspaper you take solely for business.
  • Printing and copies
  • Cards and gifts
  • Bank charges
  • Camera/tape recorder (prorate if you also use them for personal use. Don’t forget repairs.)
  • Subcontracting—If you pay someone to type or do research
  • Dues for business clubs
  • Loss—I sometimes have a loss on books sold 


If you have a home office, you can also prorate deductions on such things as landscaping, repairs (air conditioning/heating), exterminating, carpet cleaning, real estate taxes, interest and house insurance, plus depreciation. This gets sticky, so talk to someone before deducting a home office.

The Bible says to “Render therefore unto Caesar the things which are Caesar’s; and unto God the things that are God’s” (Matthew 22:21 kjv). Filing your income tax is required by law, but why pay more than you have to? Keeping good records and deducting what the government allows will help you be a better steward of the income you’ve received by spreading the gospel though the printed word. 


Have you found legitimate deductions to add to this list? Will you share your favorite method for keeping records.



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The author of 24 books and over 700 published manuscripts, including A Step in the WriteDirection—the Complete How-to Book for Christian Writers, Donna Clark Goodrich lives inMesaArizona, with her husband Gary. Also a freelance proofreader/editor and speaker, she enjoys helping beginning writers get started and encouraging advanced writers not to give up. Contact her at dgood648@aol.com or www.thewritersfriend.net. She also blogs every Monday at: http://donna-goodrich.blogspot.com

13 comments:

  1. Yikes! It's "that" time again? Really? How can that be?? lol

    GREAT tips here, Donna. Thank you for sharing!

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    1. It really messes up my year! :)

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    2. Thanks, Dora. Yes, that time of year does come fast. One thing I didn't mention is that I add up my income and expenses every month, and also year-to-date, so on December 31 I have my totals, and usually do my taxes on January 1.

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  2. Love this post! Thanks for sharing your tips.

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    1. Thanks, Sally. I think this is one way we can be good stewards of what God has given us.

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  3. Thanks for posting this helpful info today. My CPA does a schedule C but I think he misses a lot of these items. I will print this out! God bless.

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  4. Thanks, Tanya. CPAs are great but they can only work with the figures you give them, so it's important to keep good records.

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  5. I always forget to count mileage! This is a great list! Thank you so much, Donna!

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    1. You're welcome, Angie. This includes going to the post office, the office supply store, your writers' group, etc. I tell people whenever you take out your checkbook or get in your car, ask yourself if it's tax deductible.

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  6. Printing this one off, Donna. Thanks for sharing.

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  7. I'm just starting as a writer, so it is good to know these things.

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    Replies
    1. Thanks, Becky. You can email me if you have more questions.

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