As tax season creeps up its important for writers to remember that many of our costs can be deducted as expenses. There are a lot of stipulations and many of them vary depending on what state you live in. Last year I talked to a tax consultant and got the low down on what was acceptable in my state. He told me I can claim expenses for two years as self-employed but if I haven't profited from my writing by the third year I have to stop claiming it as a type of self-employment and change to claiming it as a hobby. Thankfully, I'm only working on my second year of claiming my writing expenses and I'm really hoping to sell my series by the end of this year and make that three year profit deadline!
There are quite a few things that count as expenses. Think of everything you use for your writing; paper, ink, pencils, pens, a new computer or printer maybe. All those things are deductible. Once you start keeping track of those types of expenses you'll be surprised how quickly they add up. I have a credit card I use only for business (writing) related expenses. If you can do this I highly recommend it. My card sends me a year end summary that breaks everything down into categories. It saves me a lot of work!
You can also claim your office space if you use it exclusively for your writing. Take the amount of space your office takes up and find the percentage of your home that it is. Let's say you have an 1100 square foot apartment and there is an 8x10 room you use exclusively for your writing (the exclusive part is really important). In that case you could write off 13.75% of your mortgage, utilities, home insurance, and internet (if you use internet for your writing-networking counts).
Check out this great guest post on Chuck Sambuchino's blog (of Writer's Digest) about tax tips: http://www.guidetoliteraryagents.com/blog/Tax+Tips+For+Writers.aspx