First and foremost, let me establish that we are not CPA or tax experts, and you should always check with your tax accountant. We can offer some advice on tax write-offs for writers based on my experience with the following questions:
- "I'm wondering about tax write-offs for writers. Do you know if I can I write off my "___________"?
- "I just bought a ________, do you think I can write that off?"
- "I just entered a freelance writing contest, can I write off the entrance fee?"
- "I use my new laptop for writing, is that considered a tax write off for writers?"
Legitimate Tax Write-Offs for Writers
We get this question quite a bit. Writing expenses can pile up, and since we are taxed on our earnings (even those writers who are moonlighting), we should also be able to write off the things that we purchase to further our careers.
Let's begin with those who are writing solely as hobbyists or moonlighters, and are not running their freelancing as a business. If you earn money from this writing, you will still have to pay taxes on it. Therefore, common sense suggests that you keep track of your expenses (contest fees, reams of paper) to offset any earnings that you might have. One caveat for hobbyists, though: You can never write off more expenses than the total amount that you bring in. Therefore, if you won, for example, $500 in a poetry contest in one year, you will not be able to write off a full $1000 laptop that you bought to write your poetry on.
Those who have established their freelance writing as a small business have an advantage in that area. You may be able to write off expenses that are more than your income in some of the years of operating your business. You must make a profit (meaning your income is more than your expenses) in three out of the last five years, or your business will be taxed as a hobby.
What the Writer Can Write Off
Officially, your laptop or other electronics can be written off if they are solely used for your hobby or business. A computer purchase that is subsequently used as a family machine will not pass muster.
Sometimes we use unique products for our businesses. One music reviewer asked about the magazines and CDs that she purchased for her column. These would both be considered research materials, and are a valid expense of her business. Those submitting to magazines and anthologies could indeed write of concrete expenses like reams of paper, stamps, envelopes and the like. Memberships in unions and similar organizations are also allowable.
The bottom line, of course, is to decide how you want to treat your writing, how much you want to make, and then to keep accurate records and collect receipts. Of course, always check with your tax preparer.