Tax-Deductible Expenses – Tips For Writers

This is from a link I got from the San Francisco Writers Conference Newsletter and has some valuable tips for writers as you prepare your income tax. I’m including it below verbatim: Are you a professional writer? That is, is your writing activity a business? If so, there are many deductions you can take to reduce your taxable income for the year, and thereby reduce your taxes. These deductions are quite valuable–for example, if you’re in the 25% tax bracket, each $100 in deductions saves you $25 in income tax. It will also usually save you about $15 in self-employment taxes as well. Common deductions taken by writers include: Office Expenses: If, like most writers, you work at home, you may be able to deduct the cost of your home office. This deduction is particularly valuable if you are a renter because it enables you to deduct a portion of your monthly rent, a sizable expense that is ordinarily not deductible. If you rent an outside office, the entire cost is deductible. Depreciation: When you buy property for your writing business that will last more than one year, you may deduct the cost a little at a time over a period of years. This process is called depreciation. Examples of depreciable property often used by writers include computers, cell phones, and office furniture. However, you don’t always have to depreciate long term business property. Small businesses have the option of deducting the entire cost of such property in a single year under Internal Revenue Code Section 179 or using bonus depreciation This enables you to get a big deduction...