Self-published authors face daunting questions about what they can and can’t write off on their tax returns. We at Self-Publishing Relief are not accountants, so it’s important that you get the recommendations of a trained personal accountant for your unique tax situation. But we can offer you some generally accepted information to help you begin sorting out your self-publishing finances.
FAQs About Taxes And Self-Publishing
Q: As a self-published writer, what can I write off on my taxes?
A. Generally speaking, you can write off any expenses that go directly toward the advancement of your writing career: printer paper and other office supplies, plus books or other media purchased for research are some examples. Travel for work-related events is usually an acceptable write-off too—as long as your trip isn’t a vacation in disguise. Writers who have a home office space dedicated specifically to writing can also write off a percentage of their mortgage or rental payment based on square footage. Learn more about common write-offs for creative writers.
Self-published writers can also write off the cost of publishing, including costs related to editing, design, typesetting, printing, etc. If you pay an independent contractor (like a freelance editor or a personal assistant) over $600 a year (at the time of this writing), ask for a W-9 form so that you can write off that expense. Corporations do not need to send you a W-9.
Q: What shouldn’t I write off?
A. If something you’re hoping to write off is used for both personal and professional tasks, talk to an accountant about writing it off.
Q: What if I lose more money than I make?
A: As long as you have documentation that can prove you’re serious about making a business of your writing, it shouldn’t matter if you lose money on your efforts. To prove to the government that you’re a legitimate self-publishing enterprise, consider setting up separate business accounts with banks and credit card companies, applying for a Federal Employer Identification Number, getting a local business license, etc. Learn more about proving the legitimacy of your writing business.
Q: Do I need a specialized accountant?
A: We strongly recommend that you hire a personal accountant if you are going to write off business expenses for self-publishing. Tax software programs are not always adequately equipped to make judgment calls about your indie expenses and income. And a professional accountant can help advise you if you’re audited. If you find yourself making a lot of money, you may want to research accountants who specifically handle taxes for writers.
Q: How should I keep track of my expenses?
A: Writers can itemize their expenses into categories like:
- Web and online expenses
- Professional services
Ask your accountant for a full list.
Q: What should I do about my self-published royalties?
A: You have to report all income to the government, whether from e-book royalties or print sales. Keep careful documentation.
Write Off With Care
Demonstrating to the government that you are attempting to make a profit in spite of taking heavy losses might be fine for a while. But after a time, Uncle Sam may start asking questions. In a best-case scenario, you should be able to eventually show some profit for your self-publishing efforts—five straight years of losses might raise a red flag. If you are audited, be prepared with thorough documentation and accounting.
Question: Do you write off self-publishing expenses?