Let me say right off the bat, I am not a tax professional. As such, in this article I am in no way pretending to dispense advice about what to do given your unique business status and tax situation, but I am happy to tell you the sorts of things that you can consider if you are genuinely trying to build a profitable writing business and save money on your taxes while you’re at it.
Here are examples of some of the expenses writer’s commonly have:
If you make any trips (such as to a writing conference, speaking engagement, or something else specifically related to your book, such as research) save your receipts. Some examples are:
- Conference fees
If you drive for something related to your writing business, keep a record of your miles in a notebook or file so that you have documentation come tax time.
As a writer, the tools of your trade are tax-deductible.
Some examples might be:
- Writing software (like Word or Scrivener)
- Pens, pencils, highlighters
- Notebooks and journals
- Index cards
Business and Marketing Tools
- Computer used for writing and managing your writing business
- Software used to manage your writing business (such as Quickbooks or other accounting software)
- Dropbox or other cloud computing subscription – You want backups of your work! Don’t just save them on your hard drive.)
- Domain name(s) – You might have one for your personal writer website, another for your publishing company if you are indie, and yet another for specific book titles (if you choose.)
- Web hosting – You’ll need a way to host those websites. GoDaddy and HostGator are both good options.
- Postage – This can add up when you send out copies of your manuscript to beta readers.
- Mailing Supplies
- Photocopies – If you’re doing research at a library or archives, you might need to make photocopies of relevant information found in reference books.
Professional Services and Fees
You might not need these if you’re publishing traditionally, but if you’re a fellow indie author like me, you’ll need at least the first two on this list.
- ISBNs and barcodes from Bowker
- Editing services – If you’re publishing independently, it’s worth it to hire one or more editors depending on the services you need. You’ll definitely want a copyeditor if you can possibly budget for it.
- Book cover design – If you’re skilled with graphics software, you might not need this service. If you’re not, while you can use a free cover designer like the one on Amazon (read more about that here), you might find it’s worth it to just hire a designer to create a cover for you.
- Book layout design – Hopefully, you won’t need to hire someone to help you with this, but if you do, just know this could be a deductible expense.
- Website design
Honing Your Craft
Any books, videos, software or training you purchase to help you become a better writer or to manage your writing business could be a deductible expense.
- Writing how-to – These might be books about outlining, character development, improving dialogue, novel structure, building suspense into your story, writing a novel in a month, etc.
- Marketing books – You need to learn how to sell what you’ve written. There are countless books that can teach you what you need to know, and they are legitimate business expenses!
- Reference – Style books (like Strunk and White), thesauri, dictionaries
- Research – I write historical fiction, so for me, research involves studying up on mid-18th century history, smuggling, shipping industry, lifestyle, etc. If you’re writing a story that takes place in medieval Europe, any books and films you use for researching the era could be deductible expenses.
- Online training – I’ve never completed any online training, but I know there are ample opportunities to learn all kinds of things via your web browser. One site you might like to visit is Udemy.com.
If you start planning now and keep good records all year (maybe use something like QuickBooks if you are generating a lot of income and expenses), you’ll be glad come next year when it’s tax time. You’ll have all of the information necessary to deduct your business expenses and report your business income. Believe me, it’s a lot easier than trying to scramble several months after the fact to try and remember all of the sources of revenue and expenditures.
The most important piece of advice I can give is to make sure your tax returns are accurate. A lot of people worry about being audited by the IRS, but it should be no cause for concern if you have reported everything as you should.
Regardless of whether you can make use of any of the information from this article this year or next, I wish you the best for your writing business in this year and the years to come!
This article was originally published 8 April 2015. It was last updated 17 February 2021.