What You Could Claim as a Tax Deduction

Hey everyone! Welcome back to the next instalment in my blog series Mastering Money for Writers. As discussed in my original post, we’ve been focussing on the topic of taxes (something that many of my writer friends have asked me about).

So today, I’ll be discussing what writers could claim as a tax deduction. Let me start with a few disclaimers. What I’ll be sharing below are just ideas and possibilities. At the end of the day, you still need to confirm with your accountant what will hold up in the eyes of the taxman.

The key principle I hope to get across is a huge mindset shift I experienced in my own life—so much could actually be claimed! So I hope by the end of this post, you’ll find your mind thinking more creatively about this topic.

Let’s now begin discussing one category at a time:

1. Working from home

Just like the expenses associated with operating a corporate office would be tax-deductible, as a writer, since you are operating out of your “home office”, it makes sense that certain expenses (even if it’s a small percentage) are worth noting and mentioning to your accountant.

There will be direct expenses, such as supplies for and repairs to your office. You can typically deduct these in full.

Then there will be a list of indirect expenses, like your mortgage, insurance, and utilities. You would typically divide the total cost of these expenses by the percentage of your home that’s used for business. Not good at maths? No problem; just give your accountant the figures and they should be able to guide you.

Here are some examples of records to keep in this category:

  • Furniture and other necessities
  • Internet
  • Property insurance
  • Utility bills
  • Part of your mortgage/rent

2. Car expenses

Although you may not have a dedicated “company car”, nonetheless, since you will be using your car to travel to writing-related gigs/meetings etc, this is an expense category worth noting. Bearing in mind, you can only claim expenses (or a percentage thereof) that is business-related.

Here are some examples of records to keep and/or things to discuss with your accountant:

  • Registration
  • Fuel
  • Maintenance 
  • Insurance 
  • Parking and tolls
  • Vehicle depreciation 

3. Business travel

This is by far my favourite category (although something we can’t do much of currently with COVID19). But definitely keep your records relating to any writing-related travel, whether interstate or overseas. For example, are you attending a writing conference interstate (or could you attend one)? Are you going on a book tour? Are you travelling for research relating to your next book? You may not be able to claim everything, but having records at least puts you in a better position. Which is why my motto is, keep everything!

Here are some examples of records to keep in this category:

  • Flights
  • Ground transportation (taxis, Uber, public transport, etc)
  • Accommodation
  • Meals

4. Writing costs

There are actually a lot of costs associated with writing that perhaps our readers aren’t aware of. There are so many costs we may forget them ourselves! For example, you can’t write without a functional computer these days or some basic stationery (if you like to start with a hard copy).

So here is a list worth keeping in mind for the future:

  • Electronics (computer, phone, printer, Square/payment device, etc)
  • Software (Microsoft Office, Scrivener, Grammarly, etc)
  • Data storage (hard drives, cloud-based like Dropbox, etc)
  • Office supplies and stationery (notebooks, pens, etc)
  • Business cards and other printing (promotional flyers, etc)
  • Outsourcing expenses (cover design, editing, proofreading, book formatting, etc)
  • Books purchased for resale

5. Bills and fees

Unfortunately, we live in a world where there is a fee for just about everything. Once again, if there is a connection to your writing business, these fees could be tax-deductible. For example, you sell copies of your book through your own website where people can pay via PayPal. That fee PayPal charges you is tax-deductible!

So here are examples of records to keep in this category:

  • Legal fees 
  • Accountant fees
  • Transaction fees (PayPal, Credit Card, Square, Stripe, etc)
  • Bank fees
  • Phone bills
  • Agent fees
  • Submission fees
  • Contest entry fees

6. Research

I had a lightbulb moment when I first embarked on my journey pursuing my writing passion. Reading fictional books (even if it is for pleasure, really) is actually research! Even watching an amazing story being told via Netflix is a way for me to learn about well-developed story and character arcs…catch my drift!

So in this light, here is a list of records to keep and discuss with your accountant:

  • Dues and subscriptions (writing clubs, literary journals, etc)
  • Relevant books and movies
  • Items bought specifically for writing research
  • Netflix/Amazon subscriptions

7. Advertising

Not sure if you’ve been following my blog but I’ve mentioned a number of times that one of my other passions is entrepreneurship. If there’s one critical thing I’ve learnt about succeeding in business, it’s that, no business can survive if people don’t know about its existence. There is no holy-grail business. Every type of business out there has the potential to thrive—people (the right people) just need to know you exist.

In the business of writing, like with every other business, people learn about you through advertising. This could be “organically” through social media (although this takes time and a lot of consistent effort). Or this can be fast-tracked through paid advertising.

Here are some examples of records to keep in this category:

  • Website (domain, web hosting)
  • Website maintenance
  • Advertising (BookBub/Facebook ads, etc)
  • Promotions – giveaways
  • Promotions – reader events

8. Professional Development

I don’t know about you but if I’m not growing personally/professionally, I’m dying inside. So I am a perpetual student, moving through life hungry for new knowledge—including how to improve in the craft of writing.

Any investment you make to learn new techniques and improve your business of writing are naturally things you could deduct.

Here are some examples of records to keep in this category:

  • Workshops/courses
  • Seminars
  • Conferences
  • Publishing events (Book Expo, etc)

And that’s a wrap, my last post for the year! There are a few business projects I’m trying to get off the ground, so I may need to take a break from releasing in this series. But if you follow me on social media or you’re part of Rai’s Insiders, I’ll be sure to tell you when the next post is out.

If you’ve benefited from this series so far, I’d love to hear from you! Comment below what you’d like to learn next.

Until next time, I pray your life is full of increased ease and abundance.

Raihanaty A Jalil

P.S. If you found value in this post, please share it with others.

Author: Raihanaty A. Jalil

Raihanaty A Jalil writes poetry and fiction and has been on a panel during Perth Festival Writers Week 2019. She has performed a reading of her work at the Wheeler Centre Melbourne during the Digital Writers’ Festival 2019. She currently sits on the board for Centre for Stories.