Tax tips for authors: Taking the home office deduction

Robert Pesce

Tax Tips for Authors

Many people believe that taking the home office deduction makes you automatically audited or that it drastically increases your chances of being audited. I don’t think it automatically causes you to be audited, but I do believe that it is something that auditors look at, and it does, I believe, increase the chance of you being audited, albeit still a small chance.
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Tax tips for authors: LLC or S-Corporation?

Robert Pesce

Robert Pesce

Tax Tips for AuthorsWhile the simplest way for a small business, a writer, to report their income and related expenses is on Schedule C of their personal tax return as a sole proprietor, the two most popular entities for authors thinking about expanding beyond a sole proprietor are LLCs and S-Corporations.
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Tax tips for authors: 3 Simple steps to organizing your business expenses

Tax Tips for Authors

While it is understandable that most writers would prefer to concentrate their time on their writing, writing is a business and you will need to spend some time keeping the business of your writing organized and making sure you’re taking care of all of the tax deductions that you should be. The worst way to track your business expenses is to throw everything in a shoebox.

Here are three simple steps to staying organized so that at the end of the year you or your accountant can easily get the information needed for your tax return–from the fewest number of sources–to summarize the income and expenses related to your business. [Read more…]

Tax tips for authors: Understand foreign taxes, tax credit and tax certification

Robert Pesce

Robert Pesce

Tax Tips for AuthorsIf you have sold your textbooks in foreign markets, foreign publishers may withhold foreign taxes at the source before the money is paid to your agent and before it is paid to you. If they are doing that, and you earned, for example, $10,000 in a foreign country, 10 percent, or $1,000, will have been withheld from your payment. Your agent would have received $9,000, and withheld his 15 percent commission on the $10,000 you actually earned. So you would end up getting about $7,500. [Read more…]

Tax tips for authors: Learn how your agent is reporting your writing income

Robert Pesce

Robert Pesce

Tax Tips for Authors

One of the things that can affect your tax returns is the income that you report from writing in the form of royalties, advances, etc. Many of you will have literary agents and those agents will report to you what you’ve earned at the end of a year on a 1099. While the IRS says that agencies are supposed to report to their clients the gross income amount that was received, most agencies report on the net basis, and the IRS doesn’t seem to be aware of, or care about that. But as an author, you really need to know on what basis your agent is reporting income because it could potentially affect your tax return. [Read more…]