Writing Nowadays–Taxing Writers

What the heck? I’m writing about taxes and it isn’t April? Clearly I’m violating a code. According to the media, no one thinks about taxes except in April.

Right. You can bet the IRS thinks about them an awful lot, which means you’d better think about them, too. Especially since we’re over halfway through the tax year.

Before we go any further, let me state categorically that I am not a tax attorney, accountant, or IRS agent. My advice is from one laywriter to another.

If you make money as a writer, you have to pay taxes on it, and the percentage is annoyingly high. You’re self-employed, meaning you have to pay taxes that employees pay AND ones that employers pay. You also need to file estimated taxes quarterly, though you don’t have to file in a given quarter if you didn’t make anything. No one will check with you to make sure you meet the deadlines–it’s your sole responsibility. The IRS web site has detailed information on how to do this. One service the IRS does provide is that they’ll send you a set of quarterly forms to fill out for the following tax year once you file a return with a freelancer’s income on it. Isn’t that nice of them?

Here’s the interesting part: as a writer, you can deduct an awful lot. Legally. Any expense related to your writing counts as a deduction. Some of these (completely legitimate) deductions include:

–convention registration fees, hotel, travel costs, and 50% of restaurant costs
–mileage to and from any writing-related trip (to the library for research, to a writer’s group meeting, to meet with an editor, to the office supply store to buy writing-related supplies)
–gifts you buy an editor or agent (including that round of drinks you bought at DragonCon and that time you took that agent out to lunch at ConFusion)
–any costs related to research, including books and magazines (since you need to read in your field in order to keep up with the market) and research-related trips you take, even if they’re overseas
–computer equipment you use for writing
–Internet service, if you use the Internet for writing-related business or research (and frankly, it’s almost impossible to be a writer these days without doing so)
–web hosting fees for your author web site
–your cell phone bill, if you use it for business
–the portion of your house that you use for office space (this one does get tricky, and is easiest to handle if an accountant does your taxes); this includes a portion of your utility bills, since your business requires heat, electricity, and water
–postage for mailing anything writer-related
–dues to professional writer organizations

Every year by January 31, every publisher (or magazine) who gave you money has to send you a 1099 form. This is a W-2 form for self-employed workers, and it just says how much money they paid you. A copy went to the IRS, too, so everyone involved knows how much you got.

I’m absolutely anal about my paper trail. I keep every receipt, every scrap of paper, every mileage journal. I have a set of folders, each one with its own label: Research, Travel, Gifts, Computer, Utilities, and so on. When I get a receipt, I drop it in, and at the end of the year, I tally everything up according to category and I’m done. I used to do my taxes on my own, but once I got a mortgage and adopted two children, my taxes became insanely complicated, so now I gladly pay an accountant to do so. However, he charges by the hour, so it behooves me to keep everything categorized and do the simple addition myself so he can concentrate on the number-crunching.

Okay, everyone–what’d I miss?

–Steven Harper Piziks

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Writing Nowadays–Taxing Writers — 5 Comments

  1. You can only deduct your office if it is ONLY an office, a clearly delineated space dedicated solely to writing. It cannot do double duty as the kitchen, a guest room, etc. The accountants are up to date on the continuing evolution of these regs.
    Remember too that your federal tax status will have an impact on your state income tax return. Things rapidly get complicated enough that you need a pro. However, your tax preparation fees are deductible on next year’s taxes!!

  2. Well, you have to make a quarterly tax payment if you’re earning enough.

    If your money just covers your expenses, if that, and your day job is doing the heavy lifting — it probably gets swallowed up in your day job taxes. It always has for me.

    But if it looks like your income is substantial, you’ve got to pay. Or those lovely tax penalties will kick in.

  3. Don’t count on 1099s from magazines and anthology anymore. If they paid you less than $400 they don’t have to file one.

    But they record paying you $372.57 on their taxes so the IRS can track you down if the publisher gets audited. Record every check as well as every receipt on your spread sheet.

    When looking for a tax person ask how often their clients get audited. That’s good indication of how many risks they take or how sloppy their returns are. You decide if this is the kind of tax prep you want to pay for.

    This is a good point, and it’s not out of season. June 15 was the date to file 2nd quarter estimates.

  4. You don’t have to make a profit to write off your writing expenses. You don’t even have to be published or contracted to publish. All you have to do is prove that you are a working writer. This can be as simple as having copies of your rejection letters.

    Here are some experts to give the details.

    “Authors and the Internal Revenue Code” (written by author Linda Lewis who is also a tax attorney)


    Article on self-employed writers, recently updated


    “Taxes for writers” by Cyn Mason (copyrighted 1996 so may be out of date)


  5. Cool links, Marilynn! My accountant does tell me that if your writing expenses are higher than your writing income for more than three years, your chances of an audit do go up, but if you aren’t cheating, an audit isn’t a problem.