You already know as a writer you’re self-employed. That means you can file a business return during tax season. The benefit with doing this is you can subtract money spent to make your income as low as possible. The thing with tax returns is, the more income you have, the more taxes you pay!
You can’t claim everything you spent, but you can use what the IRS considers a “qualified expense.” It’s easy to overlook some of these expenses as a writer.
RESEARCH MATERIALS
If you’re like me, you put in tons of research before becoming an authorpreneur. You’d even pay if the information was valuable.
This expense pays you back more than once. One for knowledge and the other as a “supply expense” on your tax return.
ISBN
Whether you purchase one or in bulk, the amount you pay is can be amortized because it’s an “intangible asset”. Amortization is similar to a depreciable expense where you claim a portion each year until it totals the original amount paid.
An ISBN is considered an amortized expense because it is not a physical item but is still an asset. Just like a computer, it holds value. It also has an useful life over a year which is a necessity in order to amortize or depreciate an expense.
VENDOR FEE
If you’ve showcased at a book expo or festival, more than likely you’re paid a vendor fee. Even if you didn’t do as good as you thought, it’s good to know you can claim the cost of being featured.
The vendor or exhibitor fee you pay is 100% deductible as an advertisement expense on your tax return.