Writing As an Independent Business

[choppy]

It seems to me that most writers I know, myself included, consider what they do a hobby.

But have you ever thought about registering yourself as a business? Or have you already done this?

For the most part, the income generated from the occasional sale of a short story or two isn't much - in fact hardly enough to pay for the electricity to keep your computer plugged in. But, it is a venture the writer embarks on to ultimately provide his or her community with a product (unless of course you are just journaling). Really, what's the difference (from a business perspective) between me toiling away in the evenings to put together a story that I can sell to a publisher and someone weaving baskets that she can sell on the side of the road?

Here's the thing. Come tax season (ugh), could you not claim things like the cost of your new computer, rental of/mortgage payments on home office space, paper and supplies, etc. maybe even things like vacation costs if you are using them to do research for your next novel?

I'd be curious to hear from anyone who's set something like this up. How did you do it? Is it worth it?

[KatG]

You'll want to talk to a tax accountant about it, especially as tax laws are different for different countries. As an editor/writer/instructor, I had my business officially as a sole proprietor, and my article writing -- for which most of the time I was not paid, was included with other slightly more lucrative services in editing and courses. And as such, I deducted business/office expenses, including for a home office, and kept track of them through the year.

Authors just doing writing are doing the same thing if they are getting paid for it, and can deduct business expenses. But there are laws about how long you can go in your business without showing a profit -- I think in the U.S. it's seven years. So if you're just selling short stories and making $20 here and there, then if you don't start earning substantially more within the time period, it's regarded as a hobby and you can't deduct the expenses. So, if you are interested in doing that, read your tax laws on the subject (which are sooo much fun, let me tell you.) Most sole proprietor small businesses don't need to register for a business license, but again, check the tax laws on the subject.

[Abby]

I used to work freelance as an animator, and I wrote off all of the supplies I needed (like computer, animated movies for research, books on animation, etc.) on my taxes. I considered throwing in my novel writing too, and I think the tax accountant told me that earning $5 a year from writing doesn't count as a business. There's a minimum set amount, like $200/year. I think it depends on which state you live in.

As for registering it as a business ... that sounds like more trouble than it's worth.