Skip to main content

Posts

Showing posts from November, 2013

Tax Deductions for Authors, Self, and Indie Publishers

Writing off expenses is incredibly helpful way to decrease your tax burden. However, it's not a license to defraud the government. As a rule of thumb, you should claim all of your income and pay what you owe on taxes. The challenge of collecting and reporting taxes is difficult at first, but it is part of doing business, and is a must for maintaining that business. Fail to do so could result in fines or worse. Doing the right thing will help you better sleep at night, and increase your business savvy. Author situations differ. Some authors make a lot of money and writing is their only source of income. Some have full time jobs and writing provides some of the household income. Either way, the income made from writing must be claimed during tax time. The only difference is if you have a side from writing, your employer is withholding taxes. In your writing business, you should be paying estimated quarterly taxes based on your total income (just writing or income from writing

Publishers, Authors and Taxes

A word about taxes. When working on your business, make sure that you are prepared to conduct a lot of administrative tasks to include paying taxes. For federal taxes, this means filing quarterly estimated taxes. This quarterly estimated tax depends on your total income all your sources of income including full time jobs and businesses. This tax is also figuring FICA, Medicare and any profits your business earns (total sales minus expenses). Managing taxes is sometimes and easier endeavor when filing as a sole proprietary entity, especially where state jurisdictions are concerned. In these cases, tasks will pull you from your primary business roles to handle mundane but important administration. So, before you decide to form an LLC or other incorporated entity, do your research up front. For example, I just recently converted my business into an LLC. Red Bike Publishing, LLC has a new structure and is expected to maintain that structure according to the Alabama's State D