In this two part series, Jason Henry tells us about how the tax code can be used to further your writing career. Jason will be teaching, Understanding How the Changes in the Tax Code Effect Your Writing Career, with his wife, Linda Evans at PPWC2019.
Today I want to talk to you about your writing journey, but first I want to talk about my wife.
The Fetching Mrs. Evans has put up with my shenanigans for over fourteen years. Why I’m not living in my car trying to watch Youtube on my laptop while stealing the wifi signal from McDonalds, I’ll never know. She is truly a saint for putting up with me.
She is an accountant and tax preparer by trade. She was introduced to the business by her merciless parents who forced her into child labor at the wee age of nine by chaining her to an adding machine. (I kid, I kid!)
You know, your view of the world is bound to change when you’ve married an accountant. For example, the Fetching Mrs. Evans has taught me the ways Congress has tried to modify our collective behaviors in this country by incentivizing some acts and de-incentivizing others. For example we are all encouraged to put money away into retirement accounts because that money doesn’t get taxed until you use it. We are encouraged to own and not rent housing because we can take a portion of our monthly payment off as a write-off when we own. Stuff like that.
So I want to talk about how you can use the current tax law to help you with your writing craft.
In the beginning …
The tax code is designed to incentivize certain actions. For most of the 20th century, Congress wanted to reward people for being good neighbors and community members by creating the Schedule A on the tax form. Your mortgage interest deduction is noted on the Schedule A because we believe homeowners are better community members. Those uniforms you bought for the local little league team? A Schedule A write-off. That computer you donated to the Boys Club? A schedule A write-off. The mileage on your car you gained by driving your daughters dance team to the competition? A write-off as well.
Amateur writers used to be able to take their deductions off under the Schedule A. Taking a writing class? Schedule A. Going to a writer’s conference? Schedule A! Talking on a panel at Denver Pop Culture Con? The mileage and food purchased were on deductible under the schedule A!
Things have changed.
Unfortunately for us, Congress gutted the provisions of the Schedule A in the latest round of tax reform. No more writing off convention hot dogs! No more mileage deductions for pontificating about Dr. Who at a sci-fi convention.
In order to use those deductions now, you have to put them under a Schedule C. The Schedule C is for business. All of those deductions you could have taken off for your writing hobby you can now use under the Schedule C – provided that you treat your writing as a business.
Business Best Practices
In order for you to take advantage of the tax codes you have to start practicing the habits of a business. So what does that mean?
- Keep track of incoming revenue and outgoing expenses
- Starting a separate checking/savings account
- Using contracts when you hire people to do services for you. (Cover artists, editors, formatters, & web designers, to name a few.)
- Issuing 1099 tax forms
The great thing about treating your writing like a business is that it opens up a lot of petty expenses you’re paying for as deductions.
- Going to a writers conference and you need a new dress? That is a write-off.
- Did you donate a set of your books to a library or school? Write-off!
- Did you buy a table at your local geek convention? Write-off
- What about the mileage you drove to that book signing? Write-off
- Did you have to pay for food or a hotel room for a writing event? Write-off.
- Do you pay for meals or dues in a writing organization? (Like a critique group?) Write-off
Now please don’t feel like you can write everything off. You can’t. But you if you were going to make a purchase for your writing career – and you’ve gotten into best business practices for writers everywhere – then you can legitimately claim that purchase as a write-off.
Here are some examples.
I write historical fiction and I blog on for Pikes Peak, as well as my own website. So I take 70% of my internet access as a write off. I can’t take all of it off because I, like you, watch HULU, Netflix, goof off on game sites, and send non-business emails with my wifi at home.
I take off about 50% of my phone bill because I have a smart phone and I use the data to talk to other writers through FB messenger, text, and email – which I access from my phone when I’m not at home. I will also use the internet for research, too. I can’t use any more than 50% because I gab with friends, send funny memes and other shenanigans with my phone, too.
I live close to Denver Pop Culture Con, so I don’t take the mileage – I take the cost of the lite rail.
When I teach at Pikes Peak Writers this year, I can’t take the any of the registration or hotel costs off because I’m on faculty and that’s being comp’d. But I can take the mileage for the drive down there and back.
I will have my black suit dry cleaned for the conference, so I’ll take the write-off for that, too. (I only wear suits for conferences and book launches – so this is a legitimate business expense.)
I’m going to end this blog here, but next time we’ll talk about book keeping, writing contracts, & whether or not you need to issue 1099’s in your writing business.
Jason Henry Evans says that life is funny. “In 2004 I moved from Los Angeles to Denver, newly married with a desire to be a great teacher and husband. I dedicated myself to public education and realized my heart was not in it. So I moved on. At the same time I stumbled into a creative world of art and literature I now call home. It hasn’t always been easy, but it has been worthwhile.”
You can catch up with Jason on his Facebook Author Page or on Twitter. You will also find up to date posts on his blog.