My computer search history could really get me into trouble. There are queries like, “how long for a body to decompose in salt water? Fresh water? In a well? What common household chemicals might be used to induce a heart attack? Paralysis? Mental Illness? Then there are queries like, “can I write off my cat as a business expense? (For your edification, no, you cannot write off your cat, even if she is your muse. Bummer.)
Writing, like other forms of art, seems to conjure images of a writer working from an attic office, surrounded by books and colorful art and antiques, inspirational weaponry hanging on the wall, a mug of coffee… (Maybe I’m just picturing a favorite scene from KNIVES OUT.)
The reality of it is, sure, that image describes a portion of the day, but another portion of the day is filled with the business bits of being self-employed. Even if you’re published with a traditional publisher, there are things outside of writing that need to be wrangled.
Luckily, we have all been given a beautiful outline for conducting “the business of writing,” courtesy of our federal government. I’m speaking of the Schedule C. (dah, dah, dummmm…)
This is not to be construed as tax advice. Merely, it is a handy-dandy guide to some of the bits and bobs that go into a writing career and expenses that must be tracked. You will more fully appreciate this if you’re beginning that annual task of filing your taxes.
I reference Schedule C as an outline for tracking business expenses because it is precisely that. In Schedule C, you will find a list of expenses that need to be tracked, basically, the money that comes in set against the money that goes out. Easy peasy. It’s even broken into two separate sections: Income and Expenses.
Income – the money that’s coming in. This includes all of the money you earn from the business of writing. For example, book sales or royalties, services you may provide as a private contractor – ghostwriting income, content creation for others, other copy, workshops, honorariums, advertising income from your website – anything for which you have been paid as a writer. Most of that can be pretty straightforward to track. For example, if you’ve earned more than $600 from one source of income, you will probably receive a 1099 from that source. A 1099 is a tax form, (a very expensive tax form if you have to purchase them as a pack of 50 from a certain chain office supply store… although it is a tax write-off) that is filed on the other end with a record of the amount of money that business, publisher, private contractor, has paid out to you. Some income, (generally amounts paid out to you that equal less than $600) do not require filing of a 1099, so those income streams are your responsibility to track. For example, I do not receive a 1099 for small writing gigs, but I track those on a log sheet. (More on that later.)
Expenses – this is a tabulation of everything you have spent in the day-to-day operation of your business as a writer – and this is where a Schedule C comes in very handy. At the date of writing this, you can obtain a copy of the 2022 Schedule C here: https://www.irs.gov/pub/irs-pdf/f1040sc.pdf. You can likewise just type “Schedule C form” into a search engine. Just make sure you select the dot gov link to ensure you link to a free, printable copy.
And there, under expenses, lines 8-27b, are the headings for the costs you are allowed to deduct as business expenses. Here, you’ll find things like:
Advertising, Car and truck expenses, Commissions and fees, Contract labor, Insurance, Legal and professional services, Office expenses, Rent or lease, Business property, Repairs and maintenance, Supplies, Taxes and licenses, Travel and meals, Utilities, etc.
For example, (and again, not tax advice. Just a “fer example”) Advertising. I choose this one because it is seemingly straightforward. How much did you spend on adverts for your books? Well, what about a website? Isn’t that part of owning a business and advertising your books? Reaching readers: What about the copies of your book you sent out to reviewers? Advertising. What about the copy you left at your hairstylist’s? Advertising. What about bookmarks you left at the local library? Advertising. Business cards? Advertising. Boo yah!
Understand that everything is open to interpretation, so you may want to seek the advice of an accountant, but here’s another resource too often ignored: contact the IRS. Make sure you have the person on the other end of the phone send you the documentation that covers your question. Better yet, have them highlight the section that answers your specific question. If there is a miscommunication, the burden of proof is on you, so always make sure you can back up your claim to an expense.
The two certainties in life: Death and Taxes. One of which I write about. The other… well, yeah, I guess I’m writing about that one too, but don’t take my word for it. After all, fiction – it’s what I do. Check your sources, because I deal in red herrings, false leads, and subterfuge and because Uncle Sam tends to frown upon those plot devices, especially where it concerns your taxes.