Author Steve Laube

Deadlines and Taxes

Two certainties in the life of a writer. Deadlines and Taxes.

You know what a deadline is. It has the word “dead” in it for a reason. And intrinsic to the reality of taxes is the April 15 income-tax filing deadline for those living in the United States.

But what about those taxes?

Many articles appear every Spring about taxes when approaching the filing date. But I thought we should explore a couple of items now, so there won’t be any surprises next year.

First, is the obligatory disclaimer. I am not a tax attorney or a tax accountant. I am merely discussing concepts and ideas that you may or may not use in your situation. And, as always, when it comes to your taxes, make sure to consult a professional. (We list some who specialize in working with writers in the annual Christian Writers Market Guide or the online version at www.christianwritersmarketguide.com. One of those is Chris Morris who can be found here.)

Some of you may roll your eyes and say, “I already know this.” But remember, there was a time when you did not. I get many beginner questions each year from debut authors who are discovering much of the business side of this industry for the first time.

Keep Good Records

One advantage of the self-employed writer is the ability to deduct certain expenses as they relate to the writing profession. Writers conference fees, purchasing books on writing, website hosting fees, promotional items used to market your book, etc. These are possible deductions, but you must have a record of each expense.

And I mean keep everything. Receipts, ticket stubs, bank statements, check registers, ATM receipts, mileage (when and where and how far). Nowadays some people use the camera on their phone to record the receipt. The problem is later organizing the information in one place. If you have good recommendations, post them in the comments below. (Tax Act provides an article with ideas here.)

Now is the time to start trying to collect your 2022 expense receipts if you haven’t already done so. Trying to find that receipt on April 14 might be a challenge.

Hobby-Loss Rules

If you are writing as a hobby or for something that only occasionally earns money, then you can only deduct expenses equal to the amount of your revenue. In other words, you can’t buy a submarine and claim it was for research for that underwater thriller you’ve been trying to write for years.

But if you have the intent to derive a living from your writing, you can show a loss (and maybe deduct that submarine!?). Proving intent is something judged case by case. If you show a loss in your writing business for five consecutive years, expect a red flag to appear in the IRS inbox. It is commonly understood that the IRS will accept that you are running a business if your writing work shows a profit in at least three of the last five tax years. But in an audit, the IRS can go back many years and determine if your deductions were valid. If disapproved, you will end up with a new, very expensive tax liability and additional penalties. Read these excellent articles if your business is in danger of being classified as a hobby:
When the IRS Classifies Your Business as a Hobby
What Every Self-Published Author Needs to Know About Taxes
IRS Hobby Loss Rules: Deductions for Doing What You Love

Separate Your Home from Your Business

As much as possible, keep your household income and expenses separate from your income and expenses for writing. It can be as simple as keeping a separate bank account. (This is one way to prove intent; see above.) And then keep records separately for the business using Quicken, Mint.com, or a spreadsheet.

If you work out of your home, consider exploring the home office deduction. But be careful. If you write occasionally from the home computer and that computer is used by other family members for things other than your writing business, it is likely you will not qualify.

Resources

I can recommend the book New Tax Guide for Writers, Artists, Performers and Other Creative People (Fifth Edition: 2016) by Peter Jason Riley. This is one of the few designed specifically for those in the arts.

Another good one is Carol Topp’s Business Tips and Taxes for Writers (2016).

Another is the “Tax and Business Guide for Authors” course at The Christian Writers Institute. It is currently priced at $99 for the multi-session course by a tax professional. Be sure to join the Institute (it’s free) and see if there is a price reduction or a sale, or an updated version of the course. However, $99 is a good investment if it saves you as much or more in the coming year.

For many of you, numbers are either a toxic topic or the equivalent of hieroglyphics. But take this issue seriously. The writing profession is ultimately a business. Granted a business based in the creative arts, but it is still a business. Talk to a qualified tax accountant if you have questions. Never rely on the hearsay of another writer who gives anecdotal information at a writers conference. The IRS won’t accept the excuse that “Shirley told me it was okay to write off my Australian cruise because I was researching an article about Sydney!”

[This is a rewritten and updated version of a post published in January 2012.]

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Fun Fridays – May 20, 2022

Buddy Greene proves that with enough practice you can play at Carnegie Hall! Sheer brilliance on an unappreciated instrument. It’s great that Bill Gaither showpieced this virtuoso. Hope it inspires you! (If you cannot see the embedded video in your newsletter email, please click the headline and go directly to …

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My Editor Made My Book Worse!

by Steve Laube

You just received a 15 page single spaced editorial letter from your publisher. They want you to rewrite most of the book. But you disagree with the letter and are spitting mad. What do you do?

Or your agent took a look at your manuscript and told you to cut it in half to make it sellable. What do you do?

Both examples are true stories and illustrate the universal challenge of refining your manuscript to make it the best it can be.

In the first example there was great “gnashing of teeth” but eventually my client, the long time veteran author, and the long time veteran editor saw eye-to-eye and made the book great.

In the second example my client Peyton Jones said, “Okay, let’s see what I can do.” He did the necessary work and we sold it to David C. Cook. The revised manuscript is being published in April under the title of Church Zero: Raising 1st Century Churches out of the Ashes of the 21st Century Church.

Calvin Miller once told me that he appreciated a firm editorial hand. He described it as flint striking a rock. Only when they clash is a spark created. I think he was right.

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Fun Fridays – May 13, 2022

Today’s video is a clever way to illustrate a charitable need. The Royal Philharmonic Orchestra plays Vivaldi’s “Spring” but with one-third of the notes missing, thereby showing that 1/3 of all Cancer Research UK’s funding came from gifts. Very clever. It also illustrates something else. When your manuscript seems to …

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L Is for Libel

by Steve Laube

 To libel someone is to injure a person’s reputation via the written word (slander is for the spoken word). I wrote recently about Indemnification but only touched on this topic. Let’s try to unpack it a little further today.

First, be aware that the laws that define defamation vary from state to state, however there are some commonly accepted guidelines. Anyone can claim to have been “defamed,” but to prove it they usually have to show that the written statement is all four of the following: 1) published 2) false 3) injurious 4) unprivileged.

The first is obvious. Posting something on Twitter or Facebook is “published.” And yet two weeks ago a Federal judge ruled that a blogger has the same defamation protection as a journalist. (Read the article here.)

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Fun Fridays – May 6, 2022

Not everything is as it seems. Is there a metaphor in this video for the writing life? Which one is your favorite? Mine is the third one. (If you cannot see the embedded video in your newsletter email, please click the headline and go directly to our site to view …

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Two Mistakes Made in Some Book Proposals

by Steve Laube

Putting together a great book proposal takes a lot of work. I suggest writers look at them as if they were a job application, and they are. You are trying to get someone to pay you to write your book via a stellar “job application” or book proposal.

But every once in a while we get something that is not going to work, for obvious reason. Here are two mistakes:

1. Divine Attribution. Also known as the claim, “God told me to write this.” Recently we received a proposal which claimed, “I literally hear from GOD,JESUS, AND THE HOLY SPIRIT.” (Capitalization and punctuation left intact.) One of the most widely read posts from our blog is titled “God Gave Me This Blog Post.” Please read the post and please avoid this mistake in the future.

I also see authors write or hear authors say, “I know you don’t like it when we say it, but I really felt inspired by God while writing this.” Trust me, I understand. In fact I believe you and don’t deny the validity of inspiration. But try not to make it sound like your book idea or sample writing is extra special because of it.

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Fun Fridays – April 29, 2022

Take a familiar song and mess up the words and you get today’s satirical video. Complete silly fun for a Fun Friday! (If you cannot see the embedded video in your newsletter email, please click the headline and go directly to our site to view it.)

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I Is for Indemnification

by Steve Laube

Publishing is not without risks. Plagiarism, fraud, and libel by an author are real possibilities. Thus within a book contract is a legal clause called indemnification inserted to protect the publisher from your antics.

The indemnification clause, in essence, says that if someone sues your publisher because of your book, claiming something like libel (defamation) or plagiarism etc., your publisher can make you pay the fees to compensate for their losses. This is to “indemnify” which is defined as “to compensate (someone) for harm or loss.” Bottom line: The publisher has the right to hire its own attorneys (at the author’s expense) to defend against these claims.

Doesn’t sound like a happy clause does it? But you can understand why it is there. This clause and the Warranty clause are notoriously difficult to negotiate. (The Warranty clause is where the things the author guarantees or warrants are listed; i.e. the book is original, it is not libelous in content, etc. This clause will be more fully covered by me at another time) The language has been written by the publisher’s attorneys and are usually set in stone.

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Fun Fridays – April 22, 2022

Counting to seven has never been harder. Here’s the challenge. This drummer is playing to a beat with seven counts in each measure. Your challenge is to clap correctly on the downbeat of each new measure. Don’t lose concentration, or you’ll lose the game! The musical score is provided on …

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