You don't have to be published to file your writing expenses with your taxes.

This article explains a lot:

http://www.go-publish-yourself.com/articles/writing-related/thibodeauxp.php

This was my first year but do have a couple of rejection notices, receipts for about a dozen writing books, fees for securing names for two professional writing websites through Godaddy, and ink cartridges.

Since I bought my netbook (as discussed in another thread) specifically for writing I am thinking I can write that off to.

Both the Schedule C and the Schedule C-EZ seem fairly straightforward, at this level.

To my mind, if it can be written off legitemately, why not write it off? That's practically like getting the money back, when you get your tax refund.

Of course, if you underpaid your taxes for the year -- my wife and I never do this, we always overpay significantly to avoid potentially owing -- you're S.O.L.

http://www.irs.gov/newsroom/article/0,,id=169490,00.html

IRS Publication 535, business expenses, in-depth guidelines and rules for business expenses, write-offs, deductions, business income and losses.

Hobbyists write fanfic for free on their blogs and other web sites.

Businesses try to make money.

If you're writing to try and make money, then you are not a hobbyist. You are a business.

But if they can correctly file, and get back some of what was lost, why wouldn't they?

As in all else: when in doubt, do research.

http://www.bus.lsu.edu/accounting/faculty/lcrumbley/tax_aspects.html

http://www.absolutewrite.com/freelance_writing/tax_tips.htm

http://www.publishlawyer.com/carousel8.htm

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if you think you might owe anyway -- because you didn't take out enough to begin with

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The second bit, yes. Call us undisciplined, but it works best for us right now if that extra money stays locked away where we can't make up excuses to get at it. Even during our good years when we swear we're not going to spend the savings, we invariably find an excuse to spend the savings, so it's just more practical for us to have the IRS keep it -- in spite of there being no interest gained -- so that we don't screw ourselves by spending prematurely, then owing, and realizing we've not got enough to cover it.

Only way I see this changing for us is if I can actually sell some novels in the next 5 years and pad our Day Job income enough that we're not always budgeted so close to the vest each month. We began life as a dirt-poor couple, and though our income has increased hugely since we got married 16 years ago, we're still not 'wealthy' in that we don't have a good deal in the bank at any given point in the year.

We're trying to get there, but we're not there yet.

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Hobbyists write fanfic for free on their blogs and other web sites.

Businesses try to make money.

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"Hobbyists write fanfic for free on their blogs and other web sites.
Businesses try to make money."
There's no reason you can't do both.

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Me, I spent almost $1K last year on writing expenses, and made roughly half of that. A record year -- both ways -- for me. If I am going to treat this professionally and pursue it professionally, seems to me filing the Schedule C is just common sense.

Perhaps taxes -- like religion -- is one of those issues upon which everyone is liable to have differences of opinion.

I'm following guidance from people I trust to know what they're talking about.

We'll see what happens.

Good Lord, I certainly hope I am not still showing a net loss in five years! Although it seems I read about an exception that you can file for, in the case of unusual business models that take an extra long time to put into the black.

The audit I got called in for wasn't flagged by the IRS. It was flagged by a disgruntled Bureau of Alcohol, Tobacco, and Firearms agent I was involved with in another, earlier business activity, and not thing one I could do about that malfeasance of office beyond winning my audit defense.

I did anonymously report him to a whistleblower hotline for his clumsy attempt at soliciting a bribe.

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Brad,

You get past the hobby issue if you save your rejections and submissions records. That’s the key. If you are making a “concerted effort” to make money with your writing, it doesn’t matter if you don’t. In fact, early on in writer’s careers, the best check they get every year is the refund check from the IRS because of their writing deductions.

Save all rejections and submission records. If someone from the IRS draws a short straw and has to check with you, all you do is pull out the rejections and they just nod. But that won’t happen. Just be clear and keep records in notebooks and travel journals. And don’t forget your miles to and from to the post office. You can take those as well.

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In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

• In order to make this determination, taxpayers should consider the following factors:
• Does the time and effort put into the activity indicate an intention to make a profit?
• Does the taxpayer depend on income from the activity?
• If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
• Has the taxpayer changed methods of operation to improve profitability?
• Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity as a successful business?
• Has the taxpayer made a profit in similar activities in the past?
• Does the activity make a profit in some years?
• Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?

The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year. Excerpt from IRS Business or Hobby fact sheet.

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