I’m an old guy. Over the course of my lifetime, I have worked for companies, written plans for new companies, helped start up new companies, run my own company and have watched companies I have helped start up or owned plummet into the abyss.
When I decided to take the plunge and write books, I approached it as a lifelong passion, but also as a business. Fortunately, my entry into indie-publishing had a low cost to get going and I got enough satisfaction from completing books and putting them out there. The income aspect of it wasn’t a primary concern.
Now, I’m about nine books in with two on the way and tens of other ideas for books percolating and, guess what, a little bit of income is trickling in. It’s not enough to retire, not even close. It’s enough to have a nice dinner or two with my family each month, but I definitely invest more into writing than I make at this current juncture. I’m hoping it’s an investment for the future.
When tax time rolled along that first year, I received my tax forms from Amazon and added up those sales from various book signings and realized that I had to claim this income. I also realized that I had spent money on Facebook ads, book covers, editing, book trailers and materials for book signings. I also use my home office and home computer equipment. These things became deductions. Like it or not, I was running a business and had to keep records that reflected, and supported this.
So I’m curious about the rest of you out there in the author/blogging community. Do you treat your writing like a business? Do you keep track of your expenses and reinvest into your writing business? It does take some of the enjoyment and luster out of the writing pursuit, but, given my background, it makes sense.
I’d love to hear your comments on this.
Author Don Massenzio 
I remember a bizarre moment in the bank when I was trying to explain that I was the product. And for me it’s all about presenting a brand, right down to business cards. It kinda keeps me focused.
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I keep a spreadsheet of receipts for tax purposes and use my royalties for marketing. This does mean rough periods can roll into a problem because I can’t afford some marketing options. Looking at that problem now actually. My issue is that I’m not business minded at all. I think like an artist first through fourth. So the business side can bog me down and drive me into a corner pretty easily. Guess this is why agents are important for bigger authors.
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I would guess the big authors have accountants, lawyers, etc. to keep them straightened out. I wanted to be able to take advantage of tax deductions (while they’re still available) until I start turning a profit.
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Never thought about the tax deductions. I just handed in my receipts and hoped for the best. Obviously, I have very little business or financial sense here. Are there any deductions that are artist specific?
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It’s all business related. If you use a portion of your home as an ‘office’ for writing, you can deduct a proportional amount of the utilities, insurance and real estate tax for that area. The advertising, cover design, editing, travel to book signings, etc. are all deductible in total or in part.
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I’ve used the traveling and food ones before, but it’s hard to do signings when I’m e-books instead of physical books. Love to figure out how to do a virtual signing, but all attempts tend to fall through. Authograoph would probably help there. Utilities are the tough one. How do you know the percentage/proportion?
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Physical books are a pain to carry around, but I do it as some people still like them. As for the utilities, you take the size of the room (say 10X14) and figure out the square footage. Then you figure out what percentage of your overall square footage that is. You can then either take your average yearly utilities or add up each month and take the percentage of the room size from the overall total.
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Interesting. I’ll have to do that at some point. As for the books, I made cds at one point with them on it. People loved the idea so much that they left them on the table after saying it was a cool idea.
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Reblogged this on Anna Dobritt — Author.
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Thanks, Anna
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I do track income and expenses. It’s humbling. There’s always more of the latter. I’ve been able to claim losses at tax time, but my advisor tells me I’ve had losses too many years in a row to keep claiming that. I still have to report the income, though. Sigh…
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Not sure about the number of years you can claim losses, but I haven’t hit that yet. I’m hoping that the losses will turn around before long.
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I always keep track of what I spend on writing as it is my business, but I’ve only started so we will see how it works. I aim to start slow and work up gradually and keeping track along the way is a must.
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Great article! You reminded me that everything I use and buy for this can be used as a tax deduction. Because they will certainly tax any income!
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Thanks. I’m glad you found it useful.
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