It’s now the month of May, which means you should push April’s tax troubles out of your mind for another 11 months, right? Not if you want to be a financially savvy freelancer. Start keeping track of your deductions now for a fiscally fruitful year. 

     Here are the top five categories of tax deductions related to freelance writing in the US. If you have insight on another country’s laws, email admin[at] popularsoda [dot]com. Check with your tax professional to make sure you’re claiming all appropriate deductions (and avoiding problematic ones).

1. Office Supplies

     What writer doesn’t keep a pen and notebook handy at all times? These expenses are generally tax-deductible. 

Collection of Notebooks

To keep everything kosher, consider buying “work” notebooks separate from “fun” notebooks, then use work notebooks only for writing directly related to work. Outlining plots, planning blog posts, and writing short stories are tasks related to the business of writing. Making grocery lists and keeping track of doctor appointments are not.


2. Tools of the Trade

     Remember when Duotrope went paid and everyone freaked out? Well, it turns out that a Duotrope subscription is actually tax-deductible. Do you use Scrivener to outline your books? That’s deductible, too. You may also be able to deduct your subscriptions to writing and publishing magazines like Writer’s Digest: magazines, journals, and newspapers used solely for business purposes are tax-deductible.

 

3. Professional Memberships

     Memberships to professionals organizations (like the Editorial Freelancers Association or American Copy Editors Society) can be expensive for independent freelancers. However, the cost of these memberships is tax-deductible.
     
     Pick one to three organizations to join. Fewer organizations means you can be more active in your chosen groups, leading to a stronger professional presence and a better return on your (tax-deductible!) investment.

 

4. Classes, Conferences, and Conventions

     These are actually two separate categories, but they often overlap. Expenses related to education that “maintains or improves skills needed in your present work” are deductible. If you’re a traditionally published author looking to take a class on digital publishing, that’s deductible. Similarly, if you’re a writer who wants to take a class on editing, that class should be tax-deductible because it improves your writing work even though editing might technically be a different field.

Conference photo

Breakout session at ACES 2013.

If you join a professional organization and want to go to a writing-related conference, you can deduct some of your expenses. Conference registration fees are almost certainly deductible. Check with your tax professional about travel expenses like hotels and plane tickets. Meal expenses are generally deductible if you are going out with a business associate; meals for yourself are usually not. One quick tip: take pictures of receipts with your phone so you don’t have to worry about holding onto those tiny bits of paper.

5. Self-Publishing Expenses

     If you’re like most self-publishing authors, you pay for your own editing and book covers. If you’re smarter than most self-pubbers, you deduct these expenses from your taxes. Fees associated with maintaining your professional website may also be tax-deductible. Tax deductions shouldn’t be used to justify expensive services out of your price range, but deductions might ease your mind about the cost of (completely necessary) editing and design fees.

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     Keep in mind that the IRS stipulates that these expenses must go toward a legitimate business venture that has a realistic chance of making money. That is, if you pay for the noteboks and conferences and covers but you never actually publish a book, you can’t deduct writing-related business expenses. Just one more reason to stop dreaming and start publishing.

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Do you have insight on another country’s freelancer tax structures? Got another question about freelancer finances? Send us a tweet @popular_soda.

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