All right. I can already hear you groaning. Tax time is fast approaching - and you're a writer. You have expenses. You can claim them on your taxes, right?
Yes, IF you do it the right way. Well, most of the time.
In a recent meeting of our chapter, Walt Eddy, an appeals officer for the IRS (and fellow writer) spoke to us on this very subject.
Here are the highlights.
Treat your writing as a business:
Make a dynamic business plan.
Open a separate checking account to be used only for writing expenses and income.
Keep all your receipts.
Keep a record/journal of all the events you attended and your expenses. Mileage to and from these events is usually allowed.
Do some research and KNOW which expenses are allowed and which are not.
(And sorry, for the most part, all your movie purchases probably won't make it through an audit - even if you only used them for story-line research - which of course we know you did.)
To legally use your expenses for your taxes, you MUST be submitting and promoting your work, and be able to prove it. If you haven't made any profit after three years, you might want to think twice about claiming them if you're showing a loss.
I have three more pages of notes, but I'll torture you no longer. Most of us have limits to how long taxes fascinate us, even if it is about writing.
If you'd like to know all the legal exemptions for writers and how to claim them, Walt Eddy has a website and a book, Making Expression Less Taxing: A Freelancer's Tax Resource. You can access them here:
http://www.death-and-taxes4writers.blogspot.com/
Best of luck and may you all survive another April 15th!
Thanks, Jonene! I'll be making that writing only checking account... just as soon as I get some money to put in it!
ReplyDeleteYES! Your timing is perfect! I was just trying to figure out if I needed to consult someone to calculate my taxes this year (I'm the family tax preparer normally). Because I've got lots o' expenses and a wee bit of income.
ReplyDeleteOff to check out the link!! Thanks so much! :)
Rebecca, I be thinking the same thing, my own self . . . but I be optimistic for us both!
ReplyDeleteSusan, best of luck! I hope the link helps.
Thanks, Jonene! Taxes do make me groan.
ReplyDeleteMe, too, Leisha. Me, too. And I sigh a lot.
ReplyDeleteAh, so I guess this only applies to published and NOT aspiring, right? :/
ReplyDelete♥.•*¨ Elizabeth ¨*•.♥
Elizabeth, we asked Mr. Eddy about that. He said you can claim your expenses for three years without making a profit, but you need to show you've been submitting. After three years, the IRS will probably see it as a hobby, and probably not count your claims, and probably back tax for the previous claims. You can appeal though, and if you've kept good records, there's a good chance you'll win.
ReplyDelete