Before I begin, let me state that I am not a tax pro, CPA, etc etc. These are just tips I’ve accumulated over the years.
By Daniel Ottalini
Are you a writer? Got a brand new novel out and selling tons of copies! Wonderful! Uncle Sam would like some of your money!
Bummer. Here’s some things to do to ensure you get the most out of your self-publishing career.
1.) Keep records of all your expenditures. Did you have someone edit your book? Format it? Design a cover? A webpage? Did you pay for web hosting services? Great! You can write all that off against the income you made from your book! For example, this year I had Copper Centurion edited, formatted, had a cover made for it and Antioch Burns, along with Roma Aeronautica. All the money I spent on those I can write off against the income I made from the books. Be wary, depending on how much you spent, you may need to send some additional tax forms, but I have yet to have that happen to me.
2.) Don’t file until you have all your information. Make sure you have all your 1098-MISC forms before submitting your taxes, and if you use something like TurboTax, that keeps track from year to year, make sure you check the names on the MISC forms, as some have changed, such as Amazon, which has changed the name of Createspace and some other platforms a few times.
3.) Remember Home Office, Travel, and Professional Dues credits/deductions – This year I traveled to Portland, Oregon as part of the EPIC Convention. I could deduct a lot of the expenses I had there. Some people would say you could deduct everything, and that may be true, but you really need very good receipt tracking and book keeping for that. As far as home office goes, remember that you’re supposed to use the home office only for your ‘official’ work. So your generic home computer really doesn’t fly. BUT postage for kickstarter items, car rental for the convention, that does work! (And when I get a fancy new laptop, hint hint birthday genie, I may be able to write that off as well (provided I purchase it)).
4.) Realize you should have done a much better job of book keeping this year and resolve to do it better next year.
5.) Create a checking account you use just for book-related purchases and such, that way you can keep personal and ‘self-published’ things separate. Then stick to it!
6.) When all else fails, hire a professional.