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The Steve Laube Agency

Helping to Change the World…Word by Word

The Steve Laube Agency

The Steve Laube Agency

Helping to Change the World Word by Word

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Home » Legal Issues

Legal Issues

Deadlines and Taxes

By Steve Laubeon May 23, 2022
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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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Category: Book Business, Legal Issues, Writing CraftTag: Book Business, Contracts, taxes, Writing Craft

I Is for Indemnification

By Steve Laubeon April 25, 2022
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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 …

Read moreI Is for Indemnification
Category: Book Business, Contracts, Copyright, Legal Issues, Publishing A-ZTag: Contracts, indemnification, lawsuit, warranty

A Is for Agent

By Steve Laubeon March 14, 2022
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by Steve Laube

I thought it might be fun to write a series that addresses some of the basic terms that define our industry. The perfect place to start, of course, is the letter "A." And even better to start with the word "Agent."

If you are a writer, you've got it easy. When you say you are a writer your audience lights up because they know what that means. (Their perception is that you …

Read moreA Is for Agent
Category: Agents, Book Business, Book Business, Career, Creativity, E-Books, Legal Issues, Publishing A-Z, Writing CraftTag: Agent, Book Business, publishing

What to Do About Morals?

By Steve Laubeon November 8, 2021
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In a post written last weekend Richard Curtis, agent extraordinaire, expressed surprise at a new morality clause that has apparently appeared in HarperCollins' contracts. Read his post here [warning: there is some Adult content and comments included in the post].

What the general market doesn't realize is that many Faith-based publishers have had a "moral turpitude" clause in their contracts …

Read moreWhat to Do About Morals?
Category: Book Business, Contracts, Legal IssuesTag: Book Business, Contracts, Legal Issues

May I Use Real Names of Places in My Novel?

By Tamela Hancock Murrayon September 24, 2020
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The “Your Questions Answered” Series __________ I am wondering about whether or not to use real names of places in my novel. Is it better to disguise names of towns and cafes or offices? What about popular franchises like MacDonald’s? When authors write about a town, most inhabitants are thrilled. I wrote Love Finds You in Maiden, North Carolina, and received a warm reception. I enjoyed …

Read moreMay I Use Real Names of Places in My Novel?
Category: Copyright, Craft, Legal Issues, The Writing Life, Your Questions Answered Series

Using Someone Else’s Words (What Is Fair Use?)

By Bob Hostetleron April 24, 2019
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One of the ways in which writing for publication has changed over the years involves the use of someone else’s words in something you write. Once upon a time, what constituted fair use of copyrighted material was pretty straightforward, comprising three basic factors: The length of what you use The length of what you use it in The character of what you use it in Each is relative to the other. So, …

Read moreUsing Someone Else’s Words (What Is Fair Use?)
Category: Legal IssuesTag: Copyright, fair use

Does Your Company or Church Need an Intellectual Property Policy?

By Bob Hostetleron March 6, 2019
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Suppose you’re a pastor on staff at a church. Or a reporter for your hometown newspaper. Or you’re employed by a Christian ministry. Or volunteer at a neighborhood agency. And suppose you spend time writing stuff for your church, employer, ministry, or agency. When you do, who owns what you write? Maybe you’ve never had to ask that question; but if you’re a writer, maybe you should. If you and …

Read moreDoes Your Company or Church Need an Intellectual Property Policy?
Category: Legal Issues

The Quest for Originality

By Steve Laubeon January 14, 2019
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Are you tired of being told by a publisher “We simply don’t do books like that”? or “Yours is certainly out of the box, but is not what we are looking for at this time”? What’s the Deal with Boxes? In general all books are sold under a category. Be it a fiction genre (historical, suspense, romance) or a topical non-fiction category (marriage, parenting, finance, theology). When you are told your …

Read moreThe Quest for Originality
Category: Book Business, Creativity, Genre, Legal Issues, The Publishing Life, The Writing Life

How Much Can I Quote From Another Source Without Permission?

By Steve Laubeon November 26, 2018
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Remember you can use the big red button at the bottom right-hand column of this blog page to ask us questions. (It is titled “Ask a Question.”) Question: “I don’t have a ton of quotes in this manuscript. Any I do are short—maybe a sentence. What’s your take on the whole permissions/“fair use” argument? Over the years, I have heard more interpretations/explanations of what’s …

Read moreHow Much Can I Quote From Another Source Without Permission?
Category: Legal IssuesTag: Copyright, fair use, permissions, rights

Checked Your Copyright Lately?

By Steve Laubeon September 17, 2018
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Have you checked your copyright lately? I mean, have you actually gone to the US Copyright Office web site and searched for your registration? You might be surprised at what you won't find. Here is the link to start your search.

Most publishing contracts have a clause that requires the publisher to register the copyright, in the name of the author, with the US Copyright Office. This is supposed …

Read moreChecked Your Copyright Lately?
Category: Book Business, Copyright, Legal Issues, Publishing A-ZTag: Book Business, Copyright, Legal Issues
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