As a graphic freelancer, compiling my yearly taxes is loads of fun. I go through every receipt from the entire year (and oh yes, I save them all) and input them into separate excel spreadsheets so my accountant has an easier time figuring out what’s deductable or not. Therefore, I thought I’d pass along some of the info I’ve learned over the years for writers who got paid in 2008. Note, if you did not get paid for your writing, then your writing is only considered a hobby, not a career, and unfortunately you cannot write-off anything related to it. Also, I recommend you get an accountant to look over your receipts. Freelancers are more prone to audits, and you want to make sure all your write-offs are legal and that you have the documents to back them up. These are not tips to swindle the government, these are legit ways you can try to get a better tax return this year by writing-off items you might not have realized are possible.
I’m assuming most of you do your writing out of your house/apartment. If you do, then you might be able write-off a percentage of your rent/mortgage. I don’t know the percentage for this. I just tell my accountant how many hours I work from home, then he factors in things like my boyfriend who lives with me, how many rooms I have in the apartment, etc. I think for me it works out that I can deduct 1/3 of my half of the rent because I often use the apartment as office space. I’m in a one-bedroom. Along the same lines, you can write off a portion of your internet bill, your telephone bill, cell phone bill, and possibly even your television bill if you watch TV for research. (This might be more apropos to my graphic job where I need to watch commercials to keep up with trends). Other items filed under office you can deduct as long as you purchased these items in 2008:
-Any software related to writing
-A new cell phone
-You also might be able to deduct cleaning supplies (paper towels, spray wipe, etc) if your accountant concludes part of your house/apt can be considered a home office
-Any items you may have shipped at the post office (or equivalent). This could be promotional items you mailed or packages you sent to your agent/editor
-Other misc office supplies. You know what these are. Paper clips, rubber bands, etc etc. A piece of advice. If you’re going to a store like CVS and need to buy pens as well as deodorant, pay on separate receipts. This way you can file away your office-supply receipt and not have to wade through each item and pick them out.
My rule of thumb is if there’s anything I’m unsure about, I write it down for my accountant and let him decide if it’s deductable or not. Err on the side of more deductions. Like the lottery, hey, you never know…
-Did you go to a conference this year? Everything you spent on it including travel, registration fee, meals, hotel, could be deductable
-Did you take any writing classes this year?
-Did you did you visit any sites related to your WIP for research. Example, let’s say your WIP has a scene that takes place at a concert and you went to a concert to research, you might be able to deduct the concert ticket cost. (There are rules for this, like you need to sell the book within 5 years of filing your tax form or something. So please double check with your accountant).
-Any writing books you purchased this year
-Any fiction books you purchased might also be deducted. It’s researching the genre, a writing style, etc.
-Did you purchase any DVD sets that influenced your WIP?
-Did you submit to any contests this year that had an entry fee?
-Did you submit any short stories that required a reading fee (like at Glimmer Train)
-Are you a member of SCBWI or RWA or an equivalent organization? They usually have an annual membership fee
-Did you visit book stores, either for a signing, to introduce yourself, or to purchase books? You can deduct your gas/mileage possibly.
-Did you go to a far away conference? Hotel, plane fare, taxi fare, etc. All of it can be deducted
-Did you meet with your agent or editor and that required transportation?
-Did you go any place for research (like the concert), you can deduct travel expenses
-Did you meet up with a critique group in person?
In my industry, we have something called "working meals." If I am on site, and I need to buy my own lunch. It is considered a working meal. Did you ever write in a cafe and order something while you were there? That might be deductable.
-Did you ever go out to dinner with someone and discuss writing for the majority of the dinner?
-Did your critique group ever meet over food?
-If you were at a conference and you ate meals, those should all be deductable
-Do you have a website? If you do, you can deduct the design fee, the yearly cost of the domain name, and your internet hosting fee
-Did you pay someone to create a book trailer?
-Did you purchase any promotional materials? Like, did you have book marks or other kinds of swag made up?
-Did you mail arcs to reviewers? Deduct that cost
-Did you buy business cards this year?
-Did you buy any stock photos or stock music for your website/trailer?
-Do you have a paid Live Journal account? Or a similar account (photobucket, etc.)
-Did you take out ads anywhere, like on facebook or with google ads?
Anyway, if I think of more, I’ll update this. I’m sure more will come to me over the next few days. But here is a list to get you started.