Business or hobby?
Published: November 28, 2003
|Do you make money from your writing--or plan to? Then you should be sure to track your writing-related expenses. |
According to the Internal Revenue Service, you have to report--and pay taxes on--any income you receive. Operate as a business rather than a hobby and you're entitled to deduct legitimate business expenses, which reduces the amount you pay in taxes at the end of the year.
In 1996, the year I sold my first article, I was still working full time as a lawyer, and I didn't worry about keeping track of the money I spent on postage, magazines and office supplies as I tried to publish my work. But when I started freelancing full time the following year, I also started tracking all of my income and expenses. Read on for why you should do the same, even if you're not making a profit from your writing--yet.