Tax deductions are one of the hidden perks to being a business owner. And, as a novelist, you are a business owner, even if you’ve got another full time job.
Oh, you didn’t know that?
Well, even if you are just starting out in your literary career you are staring a business because you eventually plan on selling your work and making money, don’t you?
OK, good. We’ve got that settled.
As a novelist, or any writer, you’re a business owner and the IRS allows a surprising number of deductions for business owners. And, just as importantly, they give you three years to make a profit before they consider your writing a hobby and your expenses nondeductible.
So, it’s in your best interest to finish your novel, publish and start making money as quickly as possible. Because there are a lot more perks to writing than the money you make. Visit this site for more information https://www.paydayloansnow.co.uk/
There’s also the money you save.
Just in case you don’t know how tax deductions work let’s take a quick look at that before we see what you can deduct as a writer.
Let’s say you make $50,000 a year but had $40,000 in deductions. This means that, rather than getting taxed on $50,000 you only get taxed on $10,000. So, as you can imagine, it’s a great way to save money.
So, Just What Are These Surprising Tax Deductions?
Basically anything you spend in the process of developing you product (writing your book).
Let’s take an example. Say you are writing a romance set in Greece. Well, you better do some research.
You’ll probably want to spend a month in Greece just so you get a real feeling for the people and the culture. Oh, it’s a romance, right? You’ll probably want to take your romantic partner, who is also your paid research assistant.
The romance you’re writing might just take place at some really high end 4 star hotels. So you better stay there. And, maybe the lovers take a balloon ride over the Greek Isles to see the striking view. Well, you’re a business owner and this is your job, so you better do that too.
When you get back home you’ll have to turn all that research into a book. You’ll probably need a computer, some writing software, maybe even some voice recognition software. Oh, yeah. You’ll also need an office.
Well, guess what? All that stuff is deductible. Hooray!
Or, maybe you’re writing a novel about a student in medical school. Well, guess what? That money you spent researching a medical education and getting a medical degree is deductible too. Bingo!
But, let’s say you’re not going to be writing about anything that extravagant. Say you’re just a mom with three kids who writes in her spare time. Well, if you send those kids to day care to get some time to write, you can deduct that cost too.
In fact, there are a wide variety of things you can deduct that you probably never thought of. Here are just 10 for example:
- Health insurance
- Bank fees (if you have an account dedicated solely to your writing business)
- Home office
- Background music
- State income taxes
- Your guard dog
- Cleaning services
But, the list doesn’t stop there, click here for a complete list of Tax deductions.