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Friday, January 6, 2023

Authors Can Write Off Business Expenses on Their Tax Returns

    When I started writing my first book back in 2006, I was new to the self-publishing process and didn’t know that certain expenses incurred could be written off on yearly tax returns. For example, costs such as book cover design, editing and formatting of paperback and eBook editions, and a book signing event can be written off on your next year’s tax return. As an independent author, I can’t stress enough the importance of equating your writing to running a small business. Here are some examples of the expenses that I write off on my taxes every year:

 Book Formatting and Editing.

    There are associated costs with polishing up an author’s manuscript that can be written off on a tax return, and these costs are the proofreading and editing of a book and the formatting of  eBook and paperback versions of that book. It’s probably best that new authors use a freelancer who can perform these services, and a platform that I currently use is Fiverr for all of my editing and formatting needs.

 Book Cover Design.

    Book cover design is also an added expense that I pay for and write off on my taxes, and my graphic designer is a freelancer on Fiverr. She creates professional-looking book covers at a very reasonable price―far better than I can create myself. It’s good to do some things yourself as an indie author―but only if it’s a strength of yours. For example, I’m proficient in proofreading, and I have Microsoft 365 at my disposal. However, I’m inept when it comes to formatting the eBook and paperback versions of my books, so I let the professionals take care of this step of the publishing process.

 Virus Protection.

    Ninety-Five percent of my business is conducted online, so virus protection is an absolute necessity. I’ve been using Trend Micro as my virus protection service for over fifteen years with no incidents of foul play from cyber criminals, and I also write this off on my taxes at the end of the year.

 Microsoft Office.

    Microsoft 365 is the lifeline of my writing business, and I primarily use it to write my novels as well as write articles for my blog. I also use it specifically for proofreading all of my work and write off this expense on my tax returns.

 Google Domain Name.

    I pay $12 per year for the domain name of my blog―The Indie Crime Novelist. This is an expense that can be written off on tax returns as well.

 Pay-Per-Click Advertising.

    Online advertising is the bread and butter of my business, and I use it to promote my books and my blog. Pay-per-click ads are a monthly expense that generates book sales and Google AdSense revenue. I use Amazon advertising to promote my catalog of fiction novels, and I use Google Ads to promote my blog. This is the final expense that I write off on my taxes.

    These are six expenses that I claim to reduce the amount of tax debt that I have to pay each year, and all indie authors can write off these expenses in the same fashion as I do. Writers are essentially small business owners whose primary goals are to increase revenue and reduce costs.

Related Posts:

An Author Can Start a Writing Business Online With a Credit Card

The Profit Is in the Details of Book Marketing 

Indie Authors Are Essentially Small Business Entrepreneurs

The Pros and Cons of Self-Publishing  

Is There a Market for Short Story Paperback Books?

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