Buy a book, get 2 videos!

Tax season special for 2020
If you buy the book  Business Tips and Taxes for Writers from this website (i.e. not through or other bookseller), I, author Carol Topp, CPA, will share with you two recorded videos. Tax Preparation for Writers These two videos are recorded webinars about 45 minutes each and cover:
  • Have the IRS tax forms explained in plain English
  • See a sample tax return for an author
  • Know what tax deductions are typical for writers
  • Learn about the new tax deduction for small business
  • Tax tips from a CPA and author
  • Understand what forms you need to send to subcontractors
  • Know when you need to charge sales tax and when you don’t!
  • Be alert to IRS red flags that could trigger and audit
These videos are for writers who are earning  money from their writing or have expenses related to writing and wonder what they can deduct on their tax return. This is professional advice from a CPA and author.
After you complete your purchase (via Payal) I will email you the link and password to watch the videos.If you do not receive the email, contact me, Carol Topp CPA at I hope the book and videos are helpful to you as you prepare your tax return. Carol Topp, CPA

Mortgage Debt Forgiveness Act expires

In 2007 Congress created the Mortgage Debt Forgiveness Act to offer a tax break for those who had a mortgage forgiven or cancelled sue to a foreclosure or short sale.

This Act was set to expire on December 31, 2012, but has been extended for one more year and will now expire on December 31, 2013.

Here’s some quick facts from the IRS:

Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.

You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.

To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.

If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.

If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.

Source: accessed August 1, 2013

For more information visit the IRS website:

Carol Topp, CPA

HomeschoolCPA awarded Top 25 blogs

Homeschool CPA has been selected for inclusion in The Accounting Degree Review’s list of the Top 25 Accounting Blogs of 2012.

It selected as a favorite accounting related blog regularly updated throughout 2012 with knowledgeable, useful, well-written and engaging content.

You can view the list at


I’m honored!

Thank you Accounting Degree Review! I’m glad to serve my readers at with useful, helpful information!

Carol Topp, CPA

Expiring tax provisions 2012 (in plain English)

Fast on the heels of the election has been news about the “fiscal cliff” and several tax breaks that are set to expire at the end of 2012 if Congress does not act.

Here are a few things that may affect you:

Payroll tax reduction. The Social Security (FICA) payroll tax reduction we had for 2 years expires and will revert back to 6.2%.

Alternative minimum tax: No “patch” has been put into place. The AMT exemption will drop from $74,450 to only $45,000 meaning 27 million more Americans will be subject to AMT.

The tax on long-term capital gains (from the sales of a stock or mutual fund) will increase from 0% to 10% for lower income and from 15% to 20% for higher income.

The tax on qualified dividends will increase from 15 percent to your ordinary income rates (top rate of 39.6 percent).

The child tax credit will decrease from $1,000 per child to only $500 per child. Many of you with children under age 17 will feel this one!

The adoption tax credit: reduced to $5,000 from $12,650. The adoption tax credit will not refundable, but you can carry forward unused credit.

The American Opportunity tax credit (for college expenses) will be cut from $2,500 to $1,500 per student.

Coverdell Education Savings Accounts ( a college savings account) contributions will be limited to only $500 per student per year, not the $2,000 per student we’ve been used to.

Deduction for sate sales tax instead of state income tax is eliminated.

Deduction for mortgage insurance premiums (PMI) is a thing of the past

Charitable contributions from IRA accounts expired

For high income Americans (income over $200,000 single or $250,000 married filing joint)

  • The Medicare rate will increase to from 1.45 percent to 2.35 percent .
  • An additional 3.8% tax on investment income (interest, dividends, capital gains, rents, royalties and annuities)

The estate tax rate will revert to 55% and the exemption amount will decrease to $1 million from $5 million.

I’ve listed the tax provisions that will affect most of my clients. There are over 60 expiring tax provisions, but I focused on those affecting my clients and omitted things like: Special depreciation for cellulosic biofuel plant property or The American Samoa economic development credit! 🙂

If you think any of these expiring tax provisions may affect you, please consult your tax professional.

If you are one of my clients feel free to email or call me.

Carol Topp, CPA

Author to Business Owner:Children’s author Susan Marlow

Author to Business Owner marks the launch of a new series of blog posts designed to provide first-hand business tips for each and every writer. Each special guest has graciously imparted knowledge of their writing business in hopes of encouraging fellow writers to grow and manage their own businesses.

With this, I warmly welcome Susan K. Marlow, children’s book author and part-time editor, to share her experiences with us!

Tell us what you write (genres, titles, etc):

I write historical adventure (with a biblical worldview) for kids from ages 5-14. The Circle C Adventures series for readers 9-14 features 12-year-old Andi Carter, her family, friends, and her horse Taffy in six books of Old West Adventure on the Circle C Ranch in 1880s California. The titles include: Andrea Carter and the … Long Ride Home, Dangerous Decision, Family Secret, San Francisco Smugglers, Trouble with Treasure, and Price of Truth. The Circle C Beginnings are first-chapter books for ages 5-8. They follow the younger adventures of 6-year-old Andi and her baby horse Taffy in 1874. Those six titles include: Andi’s . . . Pony Trouble, Indian Summer, Fair Surprise, Scary School Days, Lonely Little Foal, and Circle C Christmas. I also write study guides and activities to go along with the books, which make them very homeschool friendly (since they are free PDF downloads from the website). I have also written a writing workbook for ages 8-13 titled Reach for the Stars! Young authors work through all the elements (and extras) they need to create a fiction story from beginning to end.

Share a brief summary of your writing career.

My writing career was launched when I wrote my first poem, “The Reflection,” in the third grade. I moved to writing outer space stories from there and wrote throughout high school and college. As a homeschooling mom, I taught all day and “escaped” into the Old West at night. Thus were born the Circle C Adventures. Most were written before I ever dreamed of pursuing publication (in fact, I had no desire to be published. I just liked to imagine and write stories). Again, my mentor prodded me into publication so I could share my stories with others.

Do you write full time or do you still have a day job or outside income?

I have a part-time “day” job as an editor and proofreader for Winepress Publishing Group, a custom publisher. I work pretty much “full time” on various aspects of my writing – mostly marketing, which takes a good deal of time away from actually writing the latest book.

What was your big break?

My biggest publishing break occurred when my mentor, an established author in the CBA industry, endorsed my work and recommended me to her editor, who is the managing editor at Kregel Publications. As a result, my manuscript leaped over the “slush” pile and landed in the editor’s lap. Networking is the key (plus having a saleable manuscript) to having your work looked at by a publisher these days. My biggest business break occurred when the Editorial Director from Winepress Publishing found out I love to edit and proofread. She offered me a job (again, networking was crucial. She was in my writers group). This was a huge break, as it was a way of earning money that I could put back into the business without taking away from our family’s income. Most authors do not make much money from royalties, so having the extra income has allowed me to promote my books with postcards, brochures, bookmarks, etc. as well as finance homeschool conventions.

What is your business structure (sole prop, partnership, nonprofit, corporation, etc)?

I’m the sole proprietor (if that means my name is on all the official paperwork). But I couldn’t do it without my sweet husband, who organizes all of our conventions, does the banking, and takes care of all the taxes and other “business-related” tasks.

How do you do your record keeping (on paper, QuickBooks, use a bookkeeper, etc)?

Every time I make a purchase or receive any income, I write it down by hand on a printed-out Excel spread sheet my husband and I created. It is divided into a variety of categories, including the titles of my books so I can keep track of any orders that come through. After I record the expense, I stuff the receipt into an envelope for safe keeping. Once a month, I transfer the hand-written data into my Excel spread sheet on the computer, which keeps a running total of every expense and every amount of money earned, year to date. The Excel sheet also keeps track of my total net income, which is very handy, as I have to pay the IRS quarterly taxes.

What are your future plans for your business?

My husband and I have discovered that we LOVE homeschool conventions. We have done several since 2009, and did 10 in the West this last year. Our future plans include expanding to being a vendor at homeschool conventions in the Midwest in 2012, and possibly even the East Coast and South in future years. As far as my writing business, so far I have been content to be a CBA author and let the publisher do all the work putting the books together. But we are seriously thinking about venturing into the self-publishing world some day.

Thanks Susan for taking the time to volunteer your experiences and advice! We look forward to reading your stories like, Andi’s Lonely Little Foal. Be sure to visit and learn more about Susan’s stories and curriculum.

Your writing business can be just as successful as Susan’s; pick up a copy of my book, Business Tips and Taxes for Writers, to launch your own business.

Carol Topp, CPA

5 secrets to tax deductions for writers

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.

Business Tips and Taxes for Writers

Interview 10/24/11 on business tips and taxes for writers

Felice Gerwitz

Join host, Felice Gerwitz and her special guest, Carol Topp, CPA.  Carol will share information about her latest book, Information in a Nutshell: Business Tips and Taxes for Writers!

If you write you won’t want to miss this segment. Carol was asked to write this book by publisher, Felice Gerwitz, to help other writer’s who struggle with the IRS rules in regard to income as an author.

Join us for this lively and informative episode!

How to Teach Kids About Managing Money (When You’re Not Doing So Great Yourself)

Here my interview with Hannah Keeley on How to Teach Kids About Managing Money (When You’re Not Doing So Great Yourself)

Listen to internet radio with Hannah Keeley on Blog Talk Radio

So you don’t consider yourself a financial role model. Take heart, you can still teach your kids financial principles. This workshop offers tips on how to teach your kids the money basics as part of your busy lifestyle. Hannah Keely and Carol Topp also discuss what topics to teach at each age from preschoolers to college age.

View handout here

OK, it’s not a “stimulus” plan…really?

President Obama announced the American Jobs Act.

Read some of the details here.

According to the Wall Street Journal, it’s not a stimulus plan. Really?

Mr. Obama studiously avoided calling his American Jobs Act a “stimulus” plan, a term freighted with political baggage. But it calls for tens of billions of dollars in aid to state and local governments, including cash for hiring teachers and refurbishing schools, as well as a $10 billion infrastructure bank and $50 billion for transportation projects. (Wall Street Journal, September 9, 2011)

I’d like the details on this part:

Additionally, businesses would get a full payroll tax holiday for any increase in payroll up to $50 million.

How long, how many employees, etc…? My tax clients who hire employees will want to hear more about this.

This is also interesting…$447 BILLION is “small“!

Economists have noted the relative small size of the plan and the debatable impact of a temporary cut in payroll taxes. The payroll-tax and unemployment-insurance provisions would be equivalent to about 1% of gross domestic product.

What do you think?

What’s in Obama’s latest stimulus plan

By Annalyn Censky and Charles Riley @CNNMoney September 8, 2011: 9:39 PM ET

What's in Obama's stimulus planPresident Obama called for Congress to again extend help for the jobless. “At this time of prolonged hardship, you should pass it again — right away.”

NEW YORK (CNNMoney) — President Obama unveiled a stimulus plan Thursday night that he says will boost hiring and provide a jolt to the stalled economy if it becomes law.

A mix of $253 billion in tax cuts and $194 billion in new spending, the total bill for the plan is $447 billion. Given staunch Republican opposition to most new spending, the measure has almost no chance of passing the House in its current form.

But select parts of the bill could become law, and provide a measure of support for an economy at risk of falling into another recession.

“There is no problem that is more urgent,” said Pamela Loprest, director of the Income and Benefits Policy Center at the Urban Institute. “Economically, the plan hits different places. There are different parts of the economy Obama is trying to jolt.”

So what exactly does the president want Congress to do?


Payroll tax cuts: Employees normally pay 6.2% on their first $106,800 of wages into Social Security, but they are now paying only 4.2%. That tax break is set to expire at the end of the year, and Obama would like to expand and extend it. He would cut it in half to 3.1%.

Obama also wants to cut the payroll tax businesses pay in half — to 3.1% — on the first $5 million in wages.

And if a business hires a new worker or gives an existing worker a raise, all payroll taxes will be waived.

Total cost: $240 billion, or more than half the total package.

Other tax measures: Obama would offer $8 billion in tax credits for companies that hire workers who have been unemployed for six months or more and $5 billion in tax incentives for companies to invest in equipment and plants.


Infrastructure bank: Democrats, and Obama in particular, love talking about investments in infrastructure. One top priority: a national “infrastructure bank.”

Here’s how it would work: After an initial round of funding — Obama called for $10 billion — the bank would offer loans to give private-sector projects a jolt of money. Eventually, interest paid on the loans would make the bank self sufficient.

On Thursday, Obama said funds would be distributed based on “how badly a construction project is needed and how much good it would do for the economy.”

Immediate surface transportation: Nodding to an idea supported by both the AFL-CIO and the U.S. Chamber of Commerce, Obama proposed $50 billion in immediate funding for highways, transit, rail and aviation.

Modernizing schools/vacant property: The president wants to spend $25 billion to modernize at least 35,000 public schools. In addition, $5 billion would go to improving community colleges.

A separate measure — dubbed “Project Rebuild” — would put $15 billion toward fixing up vacant and foreclosed homes and businesses.

Extend unemployment benefits: Nearly 43% of the unemployed have been so for more than six months — a drag on the economy that Obama wants to soften by extending unemployment benefits once again.

Lawmakers first lengthened unemployment benefits to the current 99 weeks in 2009, and then reauthorized the measure five times since. The White House estimates another extension would cost $49 billion.

“Democrats and Republicans in this chamber have supported unemployment insurance plenty of times in the past. At this time of prolonged hardship, you should pass it again — right away,” Obama said.

Help for long-term unemployed: The president wants a new tax credit of up to $4,000 for businesses that hire workers who have been out of a job for over six months.

Subsidized jobs training: Following the lead of a job training program in Georgia, Obama wants to offer the unemployed a chance to work temporarily as a way to build their skills while they search for a permanent job.

In the existing Georgia Works program, participants don’t get paid, but they do get to keep their jobless benefits and receive a stipend of up to $240 for transportation and other expenses.

Teaching and first responder jobs: Obama is asking for $35 billion to be pumped into local communities to keep teachers and first responders on the job, while also allowing for some new hiring. Of that, $30 billion would go to educators, and the rest to first responders.

Summer jobs: Obama wants to give hundreds of thousands of youth “the hope and dignity of a summer job next year.” The unemployment rate for youth ages 16 to 24 rose to a record high this summer.


Housing help: He also vowed to work with Fannie Mae and Freddie Mac to help homeowners refinance their mortgages at historically low interest rates around 4%. (Check Obama’s housing scorecard).

How he’d pay for his plan: Obama vowed his plan would be fully paid for and asked the new debt super committee, already charged with proposing between $1.2 trillion and $1.5 trillion in debt reduction over a decade, to add the cost of American Jobs Act to its goal.

So presumably if the panel did that, its new target would move closer to $2 trillion.

The president said he would submit his debt-cutting plan to the super committee on Sept. 19. He characterized it as “ambitious – a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run.”

His recommendations will include additional spending cuts that would phase in gradually, “modest adjustments” to Medicare and Medicaid, and a tax reform plan ‘that asks the wealthiest Americans and biggest corporations to pay their fair share.”

–CNNMoney senior writer Jeanne Sahadi contributed to this report. To top of page

First Published: September 8, 2011: 9:21 PM ET