What Writing Expenses Are Tax Deductible?

tax-deductions-for-writersI’ve been writing for a couple of years now, both working on a novel and doing some freelance work. What might be considered business expenses that I can deduct on my taxes? —Kaley A.

The writing business is like any other business, and that means you get the benefit of business-related tax breaks. If you’re a writer and are earning money from your writing (or are at least trying to earn money from it), you can deduct most materials related to your writing venture. This includes pens, paper, printing costs, postage and other writing supplies (though not snacks such as nacho-cheese-flavored Doritos, even if you get your cheesy fingerprints on the supplies—trust me, I’ve tried!).

Other deductible expenses that you should keep receipts for include writing-related travel costs, conference admissions, writing group or association fees, and business lunches—such as when you’re interviewing someone over lunch or dining with a potential client. Research materials (all those books, magazines and newspapers, huzzah!) are deductible, too. You may also deduct items such as a new computer or printer, though you may have to amortize the equipment deduction over a couple of years, so it’s best to consult with a professional tax preparer on those types of purchases.

Also, it’s important to note that if you claim your writing as a business, the IRS expects you to start making money after a couple of years. So if you’re making minimal money, for tax purposes you may only be able to claim your work as a hobby, which would allow you to deduct expenses only up to the amount of income you’ve made from writing.

The key to tallying tax deductions for writing-related business expenses is to keep receipts and records for everything. That way, if you’re ever audited, you’ll have the documentation to back it up.

But, if you’re ever in doubt, consult a professional tax preparer.

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8 thoughts on “What Writing Expenses Are Tax Deductible?

  1. krysroz

    Just to be clear. If you are claiming your expenses on a Schedule C, the IRS requires you to have an income within 5 years. That is an income, not make a profit. If your royalties are $1,000 but you had $2,000 of expenses, you show a loss of $1,000. That is perfectly acceptable because you did have income for your writing. You can show a loss for as long as you are writing, as long as you have income.

    I never heard of this whole “hobby” classification. I was told, by the tax consultant for whom I worked for over 15 years, that as long as you could prove that you were soliciting your work and were active in the promotion of your business that it was in fact a business.

    Cojones, no, unfortunately, you can only claim expenses for the year you had them. But if someone gave you $20 for a copy of your manuscript, you can always file an ammended return and take your losses (expenses).

    Home office expenses are tricky. I would avoid them unless you have professional advice.

    Don’t forget to claim your internet fees, new office equipment (desk, chair, ink, etc.), research books (books in the genre you write, writing books, a copy of Writer’s Digest), ungraded software, website costs, promotion and marketing cost. Save your invoices and receipts. You’d be surprised what counts.

    Best.

  2. JanelleFila

    The writing conference I attended (deductible– cha ching!) offered a variety of different sessions with a tax “expert.” I didn’t attend any because I’m not sure I’m quite “there” yet, but I’m excited for the day I can sit at that table and ask the big boy questions! Janelle http://www.janellefila.com

  3. New_Writer49

    Dear Brian,
    Before you started the article “What Writing Expenses Are Tax Deductible?” you stated “This week we’re having a HUGE Editor’s picks sale where you can get 50% off some of our staff’s favorite resources in our shop (I picked five of my favorite, including a book of 365 writing prompts that’s now only $4!). Check it out here and save big. ” How to I order it because when you click on the highlight and selected the 365 writing prompts it keeps coming up full price. Please tell me how I can get the bundle.

    Thank you

  4. HedgeFundGrannies

    Don’t be so quick to cave into the IRS on this “guideline”. If you can show you are intending to make a profit, you can still deduct the losses. There are many start-up companies that lose money for years, and they are never subject to the hobby loss rules because they had a plan to make a profit. Also, you are generally in the clear for the first two years. When in doubt, take the deduction and let the IRS challenge you.

    Long ago, I was the tax preparer for a very wealthy family which owned a stable of racing horses that rarely won. They were challenged on this issue and won, because a horse eventually won one race.

    1. RosenLogic

      Yes, it is generally a good strategy to take the deduction and let the IRS revoke it if it doesn’t like your reasoning. And you’re right in that only making a profit in 2 of 5 years (2 of 7 for horse-related businesses) doesn’t automatically force hobby status. However, there is never a case where a cash-basis business can take a current-year deduction for prior-year expenses.

  5. RosenLogic

    Cojones—

    Expenses are only deductible in the year in which they were incurred. As stated in the original post, the IRS wants to see a profit in three out of five years; however, not having a profit doesn’t guarantee you will lose business status, but it is harder to argue for it.

    If you want to take advantage of the prior year expenses, you need to amend those years’ returns and claim business losses, at the risk of having the business status challenged.

  6. cojones

    It would be useful to know whether past-year writing expenses — not deducted because I then had no writing income to report — can be deducted in a year in which I do produce writing income. For example, over a four-year period I used Schedule C to report writing expenses (and losses, since I had not sold anything). For the past couple of years I stopped filing Schedule C because an unbroken string of reported losses is often interpreted by the IRS as a fraudulent means of reducing taxes on other income. Were I to sell my novel and generate income from it next year, though, am I entitled to deduct prior-year expenses that I have not previously reported? These include conference fees, travel expenses, research costs, supplies and printing and mailing costs directly related to writing and marketing the book, as well as other expenses such as telecoms and office equipment depreciation that can be prorated for writing vs. other purposes. Anyone have any insights about that?

  7. RosenLogic

    Home office deduction—if a portion of your home (i) is used exclusively for business, and (ii) you perform your main business activity or activities there, and (iii) you have no other place to use (coffee shops are okay, but an off-site office is not), then you may be eligible for the home office deduction. This allows you to run a portion of your home expenses through your business (utilities, repairs, mortgage interest payments). Alternatively, you can use the safe-harbor deduction, which allows you to deduct $5 for every square foot of home office space. See form 8829.

    Assets—To elaborate on what was said above: any purchase that costs at least $200 and has a useful life longer than 12 months must be depreciated as opposed to expensed immediately (this amount can be increased to $500 if you have a capitalization policy in place). See form 4562.

    Business miles—for 2014 the IRS allows a deduction of $0.555 per business mile. It is typically better to take the standard mileage rate than to use actual expenses, because then you eliminate the need to depreciate the vehicle (and be taxed on the recapturing of that depreciation when you ultimately sell the vehicle). See form 4562 and Schedule C page 2.

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