Tax time can be tough, especially if you’re self-employed. And that’s precisely what a professional author is—if you’re receiving royalty or sales income from a book or getting paid to write articles by a company that doesn’t employ you full-time, you’re running your own writing business.
It’s amazing to get paid to do something you love, but that kind of professional freedom and flexibility comes with some responsibilities, too, like filing Schedule C on your taxes and keeping track of business income and expenses.
Because you’re running your own business as a writer, though, you also get to deduct expenses from your taxes when filling out that Schedule C. Deductions offset the money you’ve made through your writing, reducing the total amount of income you have to pay taxes on. So it’s worth it to keep great records of what you’ve spent during the year and to note it all down on your taxes each April.
Confused about what deductions are allowed and which might get you audited? You’re not alone! Deductions are one of the biggest reasons why hiring an accountant is a smart move for anyone running their own business. Software like TurboTax Home & Business or H&R Block Small Business Owners can also help by walking you through available deductions.
Still, it’s a good idea to know some of the most common allowed deductions for writers and other freelancers so that you can make sure to stay organized during the year. Every little bit helps make tax time less stressful!
Here are 20 types of tax deductions that many writers can take:
- Working Space: We’ve discussed before the importance of having a space set up just for your writing, but this isn’t just to minimize distractions—it also means that you can deduct that space on your taxes. If you have a part of your home that is used for work and only work (a closet, a spare room, etc.), you can deduct an equivalent percentage of your rent or mortgage. If you pay for a co-working space membership, you can deduct that.
- Website: Your online working space is also deductible! You can deduct the cost of your domain name registration, web hosting, and any software you use on your site (like paid plugins or themes). You can also deduct services that you use to maintain your online presence, like MailChimp or Hootsuite.
- Computer Gear: Do you use your laptop only for paid writing? Did you buy a new printer this year to send out proof copies of your manuscripts? Did you get a scanner to digitize photos for a book or receipts for business? All these are deductible! Just remember—as always, this has to be something you use just for business. If you’re spending half your time playing Solitaire and your kid uses the computer for homework, then it’s not a valid deduction.
- Office Supplies: Paper and pens are key tools for writers. And they’re deductible! So is ink for your printer, file folders for organizing research, paper clips, whiteboards, and anything else that you use in the course of doing your work. Business cards can also be listed under this deduction.
- Software: Do you have an Office 365 subscription so you can use Word to write? Did you buy Photoshop to work on book covers? Do you have a Dropbox subscription to transfer files to your publisher or printer? All that can be deducted!
- Health Insurance: Are you completely self-employed and, therefore, paying for your own health insurance? You can actually deduct that! Premiums for medical, dental, and vision insurance can be deducted if you made a profit on your business this year.
- Conferences: Attending writing conferences can be a great way to make industry connections, get inspiration from other writers, and market your books. Better still, the cost of your entry fee is deductible as long as the conference is clearly applicable to your writing. So going to BookExpo: clear deduction. Going to World Tea Expo? Also deductible, as long as you went because you were working on or marketing a book related to tea.
- Travel: The cost of getting to those conferences is also deductible! Keep your receipts for airfare, car rentals, hotels, and anything else related to getting to and staying at a venue for a conference, course, business meeting, etc. The cost of traveling for an author tour is also deductible. If you stay on location for a few days after the conference or meeting for a vacation, though, you can’t deduct that—only the portion of the trip that was directly business-related is allowed.
- Vehicle Expenses: If you drove to the conference instead of flying, or you took a trip to meet with your printer or publisher, you can deduct the mileage and maintenance on your car. The easy way to do this is to keep track of your business mileage each year, using an old-school notebook or a handy app, and then multiply that mileage by the IRS’s current allowed reimbursement.
- Meals: Meals at a conference or when meeting with a client are kinda-sorta deductible. That is, you can deduct half the value. So a $5 cup of coffee at the airport on your way to a convention can net you $2.50 back on your taxes. The meal has to be for work purposes, as always—it can be dinner alone when you’re at a conference or treating a writing client or an interview subject to lunch, but it has to be completely work-related.
- Internet and Phone: If you use the internet in your office exclusively for work—again, this is not the time to be playing World of Warcraft and trying to deduct it—you can note that on your taxes. Same thing if you have a business phone. If you want to go the phone route, it’s a good idea to get a low-cost prepaid cell phone so that you have the convenience of a business-only number (no personal calls to muddy things) but you’re not dealing with the up-front cost of a new iPhone and another $70/month line when you’re only using a handful of minutes per month.
- Advertising: All those ads you’ve purchased for your books are deductible! Hooray! So the Goodreads self-serve ads, Google AdWords campaign, paid blog tours, BookBub promo, and Amazon promotions that have helped you become a best-selling author are all things you can deduct on this year’s taxes.
- Legal and Professional Services: Did you get a lawyer to help you pore over a complicated publishing contract? Hire an accountant to do your taxes? Totally deductible!
- Dues and Subscriptions: There are lots of professional organizations for writers, particularly for genre fiction writers. That membership to Romance Writers of America or Science Fiction Writers of America is deductible! Nonfiction writers can benefit here, too—your professional organization memberships, such as to the American Psychological Association or another trade group, is also deductible.
- Transaction Fees: So you know how PayPal takes a slice of every sale? And how Amazon deducts transaction and sale fees? Guess what? Deductible! Just keep track of the amount that’s being taken out of your list price and you can add it up on your tax return at the end of the year.
- Taxes: Believe it or not, there’s a bright side to having to pay both the employer and the employee portions of Social Security and Medicare taxes when you’re self-employed: you get to deduct half of it! That’s right, the “employer” portion—6.2% for Social Security and 1.45% for Medicare as of 2016—is deductible.
- Contract Labor: Did you hire a cover artist for your latest book? Pay a virtual assistant to help you manage a blog tour? Get an editor to help polish your manuscript? Great news: they’re deductible! Of course, if you pay someone more than $600 in a year, you also have to send them a Form 1099 for their taxes.
- Courses: There are tons of online courses that can help you turbocharge your writing career. If you’ve taken one this year, the fee can be deducted on your taxes! Same goes for other forms of professional development, like in-person classes at a local college or a Lynda.com subscription, as long as they’re something that helps you advance your writing career.
- Books and Movies: Authors need to read. It’s how we learn new techniques, get inspiration, and move our style and practice forward. All those books on writing? Deductible. Business books? Same. In some cases, you can also deduct fiction books and movies! This is a little bit of a grey area, so you’ll want to be careful with how much you try to take off your taxes here, but if you’re doing background research on what kind of romance novel is selling best and that means reading a bunch of romance novels currently on the market, you can probably make a case. Same with renting or buying a bunch of dramatic movies to learn about pacing if you’re working out how to write your own script.
- “Research Materials:” This is a really broad category and, therefore, a little dangerous to use too freely. But if something you’ve bought can be directly related to what you’re writing, you can probably list it on your business expenses for the year. Writing a book about the history of children’s board games? Then that copy of Chutes & Ladders is actually a valid deduction. Trying to sell some articles to BusinessWeek? You can deduct the cost of a subscription that you use to learn more about their writing style. Writing a guide on how to make money while working at coffee shops? All that coffee can probably come off your taxes. Working on a book about vintage Jaguar sports cars? Well, that sweet E-Type might seem like a straightforward deduction, but the sheer value of it may raise some red flags.
In general, if you’re thinking about taking a deduction, ask yourself a few questions:
- Is this completely and exclusively related to my work as a writer?
- Is it a reasonable expense that anyone would think is necessary for my work?
- Is it related to gear, space, or travel for my work?
If you can answer “yes” to all three, then you’re probably good to go.
If you have any doubts, it’s probably best to leave the deduction off rather than risk an audit—or just hire a tax accountant to help you work out what’s allowed and what isn’t based on your records.
Keeping great records of all your income and expenses will let you maximize your deductions at tax time and keep more of your author income.
Interested in learning more about the business of being an author? Check out these articles:
- Tax Basics for Authors: 7 Quick Tips for Making Tax Time Easier
- Starting a Writing Business: How to Structure Your Professional Author Career
- How to Break Through the Barriers to Success: What It Really Takes to Become a Full-Time Author
Word of Caution: I’m not a tax professional, just a writer who’s been through the freelance trenches for many years. All the information given here is for informational purposes only—don’t rely on it for tax, legal, or accounting advice. You should always hire your own tax, legal, or accounting advisor to get the best possible advice for your unique situation.