Writing Expenses = Tax Deductions

At the git-go, let me say I’m not a tax consultant or accountant and I am not an attorney. Before you put these ideas to work, check out the legalities for yourself.

If you are serious (an operative word) about writing, you are piling up expenses. At this moment, I’m sitting in a motel room about 130 miles from home. Tonight I will speak to a group of writers and return home in the morning — just ahead of the predicted ice storms … I hope.

This trip I’ll have mileage, meals and the motel I can itemize on my tax forms. Actually, the “I” is the royal pronoun; I use hardware named Jim. He does a fantastic job of tax preparation. What about the three-year rule you ask? Don’t you have to show a profit? Big misconception. Some of what I’ll detail here can also be found in Writer’s Digest, Writer’s Yearbook 2007, in an article called “Tax Relief” by Sue Lick. Also pay particular attention to the side bar, “Proving You’re a Business,” by Diane Kelly.

The three-year rule (make a profit in three of the last five years) isn’t exactly a rule. If you do make a profit as specified — great, you’re home free. If you don’t, the onus is on you to prove you’re running a business — you are serious about writing and are making an effort to produce income.

This quote from the article: “You can offset the taxes you owe from your day job and other sources by deducting your writing expenses” spells it out pretty well. How do you prove you are a business so you can take advantage of the deductions?

Keep rejections to prove you’re sending material out to agents and publishers. Don’t forget the postage needed to send the query, and the SASE and manuscripts out. Save receipts for writing related items like magazines, mileage to attend writing groups, conferences, etc. and dues for writing groups and contest fees plus associated postage.

Many writers include office and computer supplies, computer depreciation and a portion of your home as an office. These can get tricky and may prove to be more trouble than they are worth.

Keep good records — whether with software like Quicken (which I use) or a shoe box — to make the process easier at tax time. Since it’s January, this is a good time to start.

Finally, consult an expert and discuss your situation before you do it and file a Schedule C.

Bee Jay Sez

Happy 2007

Once again the New Year arrived, around the world, without my help. I planned to stay up until 11 p.m. (Central Time) in order to see the ball drop in NY (Eastern Time) at midnight. Alas, I didn’t make it.

Resolutions anyone? This morning I heard an on-air TV personality make a continuing resolution (apparently oft repeated) about trying to be a better person. The individual said “even if I don’t make it, I’m trying.” Oops. I’ve read in psychological literature that “try” is a failure oriented word. Don’t believe that, examine this: I invite you over tonight for steaks I plan to grill. You say, I’ll try to make it. Should I thaw a steak for you or not. I think not.

I received a manuscript returned from a NY literary agent saying: The agent who requested your story doesn’t work here anymore. You gotta admit it’s not a typical form letter rejection. Time to crank out more query letters.

Don’t “try.” Do it. Here’s a wish 2007 is the year we both have a novel accepted for representation and publication.

Bee Jay Sez