Tax time for writers

As creative members contributing to Australian society, writers and authors kind of dance to a different tax tune and whilst those of us who have been doing this for a while know what we can and can’t deduct, there are aspiring writers who might not know the ins and outs.

First, let’s talk the disclaimer. None of the following is hard fact and comes only from experience, not qualifications. Your individual circumstances will differ and change year about and you should always consult a tax professional before lodging tax returns, claims and/or deductions. This blog is for Australian citizens living in, and working in, Australia only. Writers SA will not be held responsible if you lodge a fraudulent or exaggerated tax return.

Now that that’s out of the way, let’s dive in. Before lodging your first return as an author, you need to work out if you’re writing as a hobby or a business.

If you are a hobbyist, you might not have to declare your income but you also can’t claim deductions along the way.

For the purpose of this post, we’re assuming you’re serious and not writing just for fun. We’re assuming you’re earning something from your writing (it doesn’t have to be much) and have deductions. It’s okay to be mercenary about your writing. It’s okay to be paid and it’s okay to demand to be paid. You are now considered a Special Professional.

The following link will give you more accurate information than this blog.

From the ATO website – ‘Here are three golden rules for what we accept as a valid business deduction:

  1. The expense must have been for your business, not for private use.
  2. If the expense is for a mix of business and private use, you can only claim the portion that is used for your business.
  3. You must have records to prove it.’

So, some home office expenses such as printer, paper, ink, stationary can be claimed. If you have a meeting with an author, agent or editor, that is an expense you have incurred and can be deducted, coffee, lunch, parking, kilometres on your car. There are certain travel expenses resulting from conference attendance, speaker gigs, research trips you can also claim. Did you buy any books that contribute to your process or methods? You might also be able to claim those. Your Writers SA membership is a deduction as are other fees associated with organisational memberships and professional development opportunities. Are you a union member? Do you pay dues? Think about anything you do as part of your writing job and how much that costs you. Depreciation on furniture for your office and your computer might also be possible (there are tricky GST questions here too but that’s another post!).

The golden rule is to keep your receipts. All of them. A great habit to get into is to take a photo of the receipt and email it to yourself with a subject you’ll be able to search before putting the receipt in a dark, cool place (so the ink doesn’t fade). ‘Tax 2023’ works well enough. That way, at the end of the year (or period if you’re reporting regularly as a business) you do your search through your inbox or folders and everything magically pops up.

Now, if you’re not actually earning anything from your writing, there are ways to still claim such as if you have a day job, you might be able to make those claims from the current year’s TPI income if you fall within a certain bracket (TPI – taxable professional income, not as a special professional). You can also hold over expenses for up to seven years with the optimism that you will one day, earn a living from your passion.

Remember to speak to your accountant and make it very clear that you are a ‘Special Professional’.

One example of deductions from one anonymous author:

One interstate conference attendance – $1500

Accommodation – $1300

Flights – $300

Meals and sundries – $300

Books purchased in the financial year – $180

Member fees and dues – $400

Software subscriptions – $99

Website expenses – $300

Website build – $2500

Contest entry fees – $90

Meetings attended (parking, meals, kms) – $350

Home office supplies – $200

Electricity to the home office – $100

Internet (claim a portion such as 20%) – $240

Mobile phone expenses (a portion 20%) – $240

Writers Festival – $80

Workshops or professional development studies – $450

Accountant fees – $250

That is a whopping $8,579 this author can deduct from their income for the current year.

Whatever your situation, make sure you see an accountant or tax professional and don’t try to do this stuff on your own. Your accountant fees are also a deduction for the next year just in case you were wondering. Good luck and happy reporting!

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