Here are some great questions on tax deductions asked by authors at a recent writers conference:
What are some obvious, over-the-top tax deductions?
Excessive losses year after year, especially if the losses exceed your full time wages from employment. Excessive travel and entertainment expenses, especially if it appears you took a nice vacation and tried to call it a research expense.
I read a lot. Some of the books are to study other writers or my genre. Are the books I read tax deductions?
This is a gray area. Just keep your business deduction for books reasonable and small and they would probably be justified as business deductions.
I like to be around people when writing and usually write at my local coffee shop. Is the mileage to the coffee shop a business deduction?
Your location to write is a personal preference and not a necessary business expense, but rather a personal expense. The mileage is not deductible.
I hired a transcriptionist. Is it a tax deduction?
Yes; you might put the expenses under Contract Labor or Other Expenses on the Schedule C tax form.
What’s a tax deduction that most writers don’t know about?
Gifts given to business clients or your agent, editor or publicist are deductible. The IRS imposes a limit of $25 per person per year.