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Writers and Tax Deductions

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April 15th is fast approaching and the Tax Man expects his pound of flesh. Or, roughly 30% to 40% of your total body weight might be more accurate. But what does that mean for aspiring authors? Deduction opportunities.

In the April 2006 issue of Writers Digest, Sue Fagalde Lick provides useful tax tips for writers. Swing by your local newsstand to pick up a copy because the $5.99 cover price will definitely be a wise investment.

Lick points out that if you’ve earned any money writing, then you are legally obligated to report that income so Uncle Sam can get a taste. But, “even if you haven’t sold anything yet, you can offset the taxes you owe from your day job and other sources by deducting your writing expenses,” Like writes.

The article provides some basic bookkeeping tips for setting up your records. Once you have your mechanism for tracking expenses, “the IRS will let you deduct any unreimbursed expense that’s considered ‘ordinary, necessary and reasonable’ for the pursuit of your writing business,” Lick explains. “These include office supplies; computers, software, toner and repairs; Internet fees and Web site charges; long-distance telephone calls; travel expenses;… postage; photo equipment and processing fees; membership in writing organizations; classes; conferences and workshops; books and magazines; and interest on credit cards used only for business.”

I know a creative writing teacher who was audited. He had to go meet with an IRS representative and she lived up to the reputation. This old crone sat across the table and scrutinized his crumbled receipts and expense notations scribbled on torn envelopes. 

“Do you seriously expect me to allow you to deduct the cost of Penthouse and Hustler subscriptions from your taxes?” the auditor asked.

“I’m a writer and my work involves both pop culture and the shadier elements of our society,” the writer replied. “It’s imperative that I stay up to date on the writing that is published, as well the topics being discussed, in such magazines. You would never dream of arguing that a doctor shouldn’t read the latest medical journals to learn about new techniques. You wouldn’t deny a software developer’s need to read computer magazines to learn about new technologies. I have the same professional need for skin mags.”

He was allowed the deduction.

So pick up Writers Digest, follow Lick’s advice and you might be able to deduct your subscription to Cat Fancy, the three reams of paper needed to print your science fiction novel about Euchre players in the Trafaldrian Galaxy, and the gas spent stalking editors building your network of professional contacts. Plus, it’s finally a way to get something for all those unreturned postage stamps.