Writers, as a group, are usually bad at taxes. That’s because we’re not numbers people.
But you’ve got to get better at your taxes, because it’s costing you a fortune. Writers pay about 30% of their income for taxes. And that’s after an agent takes 15%, or after several publications don’t pay you for freelance articles, so it’s really hurting your bottom line.
It’s easy to focus on playing offense as a writer: trying desperately to find ways to earn money. But don’t forget to play defense! Every deduction you take reduces your expenses by a significant amount and puts money in your pocket.
Below are the most common expenses that writers have the opportunity to claim, and whether it’s okay to deduct them.
1. Can I deduct my coffee/tea at my favorite writing cafe?
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Sorry, but no. Unless you’re meeting with another writer, food and drink isn’t considered a deductible business expense. Here was my logic: I’m not really paying for the drink, I’m paying for a seat to write in. But sadly, this logic does not square with the squares at the IRS.
2. Can I deduct my Netflix?
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Most of the time, yes. Especially if you write fiction. Especially, especially if you write, or are planning to write, a screenplay. Think about it: every single thing on Netflix is a story. You are a storyteller. This is a slam dunk.
Personally, I’ve never watched something on Netflix and not learned something about story, about dialogue, about scenes, about editing. To me, nothing could be more essential for my writing business.
If your kids watch cartoons on Netflix, though, you might only be able to deduct part of the Netflix fee, since technically others are using the service too, and those are non-deductible expenses. Check with your tax man on this partial deduction.
3. Can I deduct food and wine bought for my writing group or book club?
You can deduct 50% for entertaining expenses, as long as the primary purpose of the gathering is writing. Book clubs count because you’re discussing literature the whole time.
What I do is use a separate credit card and a separate bank account and pay for the party food separately at the grocery store. That way Uncle Sam can see that I’m not lumping all my groceries into this party expenses, only the food and drink I’m using for that one night.
4. Can I deduct my website?
Yes, deduct your:
- Domain name
- Hosting Fees
- WordPress Themes
- Anything you pay a graphic designer or programmer
- The caricature of yourself you bought on Fiverr for $30 and which you use as a profile picture because you’re embarrassed to use a selfie
5. Can I deduct my magazine and newspaper subscriptions?
Absolutely. Anything that you pay for that has words, you should deduct. Not just your writing magazines like Poets and Writers and Writers Monthly, but also your Women’s Health and GQ and Sunset and Popular Mechanics.
One, you’re learning when you’re reading, learning about language and sentences and structure. Two, if you freelance at all, you’re doing market research by reading the magazine. So deduct every single magazine that you subscribe to.
And if you said: “Ha! Who subscribes to newspapers any more?” Well, anybody who actually believes journalism has a role in a democracy. If you’re not supporting fellow writers with your wallet, you are crippling our country, your fellow writers, and the field of journalism. Sorry (not sorry!) for the guilt trip. Please subscribe.
6. Can I deduct my home office?
Everyone is scared to deduct a home office. They think it’ll be a red flag and they’ll be audited. But that’s largely a bygone myth from the 90s, back when small office rules were being abused. You should deduct that small office if you use it for writing, and just do it properly.
You can deduct the room if it is devoted solely to your writing (e.g., it’s not a playroom that you have a desk in). Here is official IRS language: “using the space as your principal place of business or for some other acceptable purpose and using the space regularly and exclusively for business.”
Plus, in 2013 the IRS offered a newer, simpler way to deduct home offices. Here is the golden rule: You get $5 of deductions for every square foot of office space. For instance, my office is 140 square feet (yes, I had to pull out a measuring tape). That means I get a $700 deduction.
7. Can I deduct furniture?
Yes! If you buy an office chair, deduct that. If you buy a desk, deduct it. If you buy a desk lamp, deduct it. If you buy a scorpion inside amber to sit on your desk and inspire you to think of ingenious ways a serial murderer can kill people, deduct that.
Anything you buy for your home office, deduct it.
8. Can I deduct a new computer?
Yes, but only to the degree that you use it for writing.
For instance, if you use your computer 70% of the time to browse social media, and 30% to write, then you might not be able to deduct the full cost of your computer. Talk to your tax accountant and see what is the most that you can deduct if you buy a new computer.
9. Can I deduct my submission fees?
Absolutely. All those $3 electronic fees for submitting to journals, and all those $20 fees for contest submissions, those go straight into your Excel spread sheet (or however you choose to record all your expenditures).
10. Can I deduct my miles?
This is one of the biggest categories that writers miss out on. Get Miles IQ on your phone, and track every trip that you make that’s writing related. Going to Barnes & Noble, going to a used bookstore, going to your book club, going to your writer’s group, going to the post office, going to a conference, going to the coffee shop to write, going to a meeting, etc, etc, etc. If it is related at all to writing, deduct those miles pronto.
You can deduct 54 cents a mile in 2016. And guess what? I would have estimated about 200 or 300 miles driven for writing in a given year, but when I started keeping track, I was up around 1200. That’s almost $700 dollars in deductions right there.
11. Can I deduct my software?
Um, yes. The best software I ever bought for writing was not writing software, but it made me write 5x as much.
It’s called Freedom, and it blocks the internet for certain chunks of time (say, when you write from 9:00 – 12:00) and it also can block certain websites (I’m looking at you, Facebook!) to prevent you from wasting time. Of course, if you are a black belt master at self-control, then you don’t need this. Which basically means, all the human beings who are still reading this should buy Freedom.
If you pay to maintain a mailing list (EVERY WRITER NEEDS A MAILING LIST), then deduct the fees you pay to Mailchimp or wherever.
12. Can I deduct writing research trips?
If the primary purpose of your trip is to do research for a book, and if it’s not a cleverly disguised family vacation, then yes, you can deduct any trip you do for the purposes of research.
If only part of the trip is for writing research, then you deduct just that part, and just for yourself (if you’re traveling with others).
13. Can I deduct things that I buy for writing research?
This is a broad category, but let’s say you’re writing about boardgames. As in, your entire novel concerns a character who loves boardgames and creates boardgames. Yet you don’t know much about boardgames other than Monopoly and Clue. Well, you have to educate yourself in order to do your job as a writer. So buy a bunch of boardgames and write it off as research. Just be prepared to show the IRS the manuscript that includes the boardgame character!
Of course you can write off all books that you buy, because all books are research for writers.
14. Can I deduct job-hunting costs?
Yes, absolutely. If you spend any kind of money looking for freelance writing jobs, or for an agent, or for an editor, you can deduct that.
15. Can I deduct childcare from my writing business income?
No, you can’t. There’s something even better! It’s not a deduction, it’s a tax credit! A tax credit gives you money back in your pocket, while a deduction just saves you about 30% of the money you would have paid in taxes.
So if you have kids in preschool or with a nanny, you can get a hefty tax credit from that money from the money you earn as a writer, usually between 20% and 35%. But don’t go overboard — the maximum amount you can claim is $6,000 for up to 2 children.
16. Can I deduct my Social Security taxes?
Bet you hadn’t thought of this one. So those who are self-employed have to pay double the amount of SS tax and Medicare tax that employees of a corporation do, because if you’re employee, you pay half and the company pays half, but if you’re self-employed you have to pay both halves.
But here’s the great thing. You can deduct the second half that you pay! Isn’t that nifty?
Just beware: this is not technically a business expense but a personal expense, so you have to deduct it elsewhere. Still, in the end it’s money saved.
17. Can I deduct bank fees?
Yes! If you get charged for a cancelled check or for taking money out of an ATM, you can deduct that money. If you’re paying for a bank account (poor you — please do yourself a favor and find a credit union), you can also deduct those fees.
18. Can I deduct deductions I didn’t take from last year?
Absolutely. Think about this scenario: say you had a bad year. You hardly earned any money. In fact, your expenses were far great than your earnings, so you didn’t take them all, because you didn’t want the IRS to look on you suspiciously. But the following year was a bonanza. The floodgates opened and showered you with $$$. You wrote a ton of freelance articles, or you published a book. Hallelujah!
Well, now you do what’s called a “Carryover.” You take business expenses from last year and roll them into this year. Bingo! Less taxes to pay.
19. Can I deduct what I pay an accountant?
Yes, you can deduct whatever you pay someone to do your taxes.
20. Can I deduct conference/writing retreat expenses?
Deduct everything! Deduct your hotel room, your airplane trip, your parking fees, and even 50% of your food costs, including tips. When you’re away from home in a different city, the IRS allows you to deduct everything that is business related.
21. My shoulders/arms/butt are sore from doing so much writing. Can I deduct a massage?
If it is medically necessary. Get a note from your doctor and you are good to go. Just make sure you claim the massage is directly related to tension that comes from your work.
This belongs to the category of “medical expenses.” Anything to do with weight loss programs fits into this category as well. So yes, you can deduct that Shakeology or protein powder or Jenny Craig.
22. Can I deduct all the marketing I do for my books?
If you’re giving away free copies of your book for promotional purposes, you can deduct that! If you’re paying a publicist, or paying for an ISBN, or paying someone to build you an author website, that’s all deductible.
Here are handy tips to keep your files in order:
1. Keep a record of your expenses.
I use Excel spreadsheet because it’s easy. If you have a credit card you use exclusively for Business, that’s an easy way to keep everything organized. Just pick a credit card without a monthly fee. I use Chase Ink Business Cash card.
2. Use Evernote to record all your receipts.
Any physical receipt that you have, take a picture using Evernote and then throw away the receipt. Bingo! No stack of useless paper lying around. Everything is now electronic. And Evernote will remember it forever, so in the unlikely case you are audited, you will have backup.
Pro Tip: write the purpose of the expenditure on the receipt. “Took Writing Partner Mindy out to Dinner.” That way you can remember and explain it to the IRS. Surprisingly, you don’t need a receipt if the expense is less than $75. In those cases, a bank statement will suffice.
3. Talk to your tax guy.
Give him a call halfway through the year and ask for advice. Ask him questions when you do your taxes. He’s a professional and should be able to give you ideas for how you can save more money.
Ask him or her to give you 3 ways you can save more money on your taxes next year. If they don’t have any ideas, then get a different tax professional.
4. Consult this handy dandy website called 99 Deductions.
This website offers additional deductions that apply specifically to writers. The link above is directly to the “Author” page, and it lists common deductions for writers (even including a few that weren’t mentioned on this page!)
I hope that’s all encouraging to hear, and gives you a lot more things to deduct on your taxes. It really doesn’t take that much time. A little bit of organization will save you hundreds or thousands of dollars.
The most common objection I hear is: I’m not taking deductions because I’m not earning money from my writing. Well, in that case, the IRS might judge it as a hobby rather than a business. But if you’ve gone to school for it, or if you’re earning some income and working regularly, you can fight to have it judged a business.
Most writers earn very little money for several years before finally getting regular income from books, speaking engagements, and freelance opportunities. Still, the IRS wants to see income and profit within about three years of taking deductions, or else they start to get suspicious.
Disclaimer: I am not a tax professional or the son of a tax professional. Although I’ve done my best to make sure the information on this page is accurate, don’t come crying to me if the IRS starts spanking you for some borderline-illegal behavior. Also, consult with a tax professional before doing anything drastic. Be safe out there, folks.