I did my taxes this week. For the first time ever, I listed my occupation as “WRITER’. Kind of scary, but it’s the real deal. I write full time. The nice lady at H & R Block asked me how much I’d earned from my writing this year. Nothing, I admitted, but my prospects are good. How’s that for optimism?She gave me a worried look. Really? Nothing?
I told her it’s not as easy as it looks. There’s a learning curve involved. Immediately, she brightened. Good, she informed me, you can deduct educational expenses toward earning your degree. When I told her I wasn’t enrolled at my local accredited institution, she got that grumpy look on her face again. I told her I have taken classes this year, from respected professionals already working in my industry. We went back and forth on what I could and could not claim on my taxes as legitimate deductions for writers. While I do not (in any way) claim that these deductions apply in all situations for all writers, these are the legitimate deductions she allowed me to claim:
1. Health Insurance – As a self-employed writer, I pay for my own health insurance. It’s expensive, but nice to know I can deduct that monthly hit at tax-time.
2. Membership Fees/Dues – To professional writers’ organizations.
3. Registration Fees – For writing conferences and workshops (but NOT contest entry fees).
4. Subscriptions – To professional publications and organizations (like the World Con).
5. Travel Expenses (transportation costs, lodging, tolls, taxi, but not food) – To destinations such as writers conferences and workshops.
6. Books (to a limited extent) – While I do keep track of all the books I buy, she would not allow me to deduct all the books I purchased during the year. I was, however, able to provide a figure of how much I’d spent on books about writing and the craft of writing. I’ve changed the spreadsheet I use to track my expenses to break this out so that it will be easier to calculate next year.
7. Office Supplies and Consumables – This includes not only that expensive toner, but the paper and other office supplies I use for writing.
8. Marketing – This was a big surprise for me. Expenses related to my blog or book promotion (not that I’m doing much on that front yet). Good to know.
9. Charity – As I donate every year to NaNoWriMo, it’s good to know that it helps me out on my taxes, too.
It added up to quite a bit. I hadn’t realized that the marketing, classes, and conferences (even the online ones) can be deducted. I realized I’ve been far too focused on the costs associated with attending writers conferences and workshops, in particular. She helped me to change my thinking about these expenses and to see that they are really investments in myself, as a business. As a writer.
I’ve made some changes to the excel spreadsheet I use for tracking my expenses. Next year, filing my taxes will be a breeze because I will have tracked everything separately (especially the tax deductable parts). And maybe, I’ll even have made a sale!