Disclaimer: This article provides general self-employment tax information that may apply to writers and authors in the United States, depending on tax filing status. Users should consult a qualified tax preparer or accountant for the latest tax laws and for specifics on how these rules might apply to an individual tax situation.
If you are earning money from your published book/s or as a freelance writer, you may be considered “self-employed” by the Internal Revenue Service (IRS) and be privy to special tax deductions.
As a self-employed taxpayer or someone who generates self-employment income, you may have the opportunity to take into account your costs of doing business when filing your taxes. To claim these deductions, you’ll need to complete a Schedule C “Profit or Loss from Business” form where you’ll list how much you made (income) and how much you spent (expenses) to run your business the prior year. Your costs of doing business are deducted from your total income, resulting in your taxable income. This means you won’t have to pay taxes on ALL of the income that you earn, which is great news!For a business expense to qualify, it must be both commonly accepted in your trade and necessary for your business. Here are 14 common business expense deductions for writers and authors:
1. Home office space – to qualify, your home must be your principal place for conducting business, and the space must be used exclusively for your business.2. Equipment and supplies – pens, paper, printer ink, postage, desk, and more, along with your computer equipment. Internet and phone expenses can be deducted if used exclusively for your business.3. Health insurance premiums – if you pay for your own medical, dental and vision insurance, you can likely claim a deduction for 100% of the premiums.4. Transportation, lodging, and meals – includes flights, taxis, car rentals, hotels, and parking for business-related travel and meetings. You can deduct half the value for meals.5. Mileage – includes business-related trips, errands, and trips from your home office to meetings or events.6. Conferences and education – includes writing and networking events, classes, courses, workshops, and more.7. Software – includes writing software, design or formatting software, audio and video editing software, and more.8. Research expenses – investments in books or other assets for researching your work.9. Professional services such as editing and design – if you hire professionals to help with editing, book cover design, formatting, legal, etc. you may be able to deduct their wages.10. Membership and submission fees – includes professional organizations, journal and magazine submission fees, contest entry fees, and more.11. Subscriptions – includes journal and magazine subscriptions, web hosting, email services, and more.12. Advertising and promotional expenses – includes online ads, signs, print ads, video trailers, business cards, bookmarks, branded merchandise, book copies ordered for marketing purposes, and more.13. Transaction Fees – services like PayPal take a chunk of every book sale, and these transaction fees may be deductible.14. Taxes – the bright side of having to pay self-employment tax is that half of the amount is deductible.
The IRS will require documentation for any business expenses you deduct, so be sure to keep really good records and save all receipts for three years after you file your taxes. Consider investing in a scanning device so that you can scan and save all of your receipts electronically.
Filing taxes can be a complicated process, especially if you are self-employed. We always recommend consulting an experienced professional when dealing with legal and financial matters related to your author business. The Authors Guild provided this helpful Q&A session in February of 2023 if you'd like more information: https://www.youtube.com/watch?v=7yE2bTj96Gk.
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