One thing I noticed recently (when checking IRS rules on home office). It used to be, I seem to remember, that you had to have a specific room dedicated to business use to claim the deduction. This is no longer the case; according to publication 587 "The area used for business can be a room or other separately identifiable space. The space does not need to be marked off by a permanent partition." Not sure whether this was changed to keep up with the large numbers of people switching to WFH during the pandemic, but in any case it's a big help for people who designate part of a room, rather than an entire room, as their working area. (HUGE, obviously, for the most space- and cash-strapped, people who can only afford a studio apt, or a room in a shared house or apartment, or maybe have kids so there is no extra available room for work.)
Thank you for this, Lincoln. I have been stressing about how taxes will work for me this year as it’s the first time I made over $600 for writing or podcasting. You have simplified it and made it less stressful.
Nope. If you are getting 1099 income from writing, you are a business regardless of whether you formalize this as an LLC or S-Corp. You count as a “sole proprietorship.” You file your business income on a schedule C form… although again I’d recommend a CPA.
there are HUGE ADVANTAGES TO LLC vs S-Corp. and this should be a YES, especially since some of us don’t have the book deals or royalties from anything because well. . . Borges.
One thing I noticed recently (when checking IRS rules on home office). It used to be, I seem to remember, that you had to have a specific room dedicated to business use to claim the deduction. This is no longer the case; according to publication 587 "The area used for business can be a room or other separately identifiable space. The space does not need to be marked off by a permanent partition." Not sure whether this was changed to keep up with the large numbers of people switching to WFH during the pandemic, but in any case it's a big help for people who designate part of a room, rather than an entire room, as their working area. (HUGE, obviously, for the most space- and cash-strapped, people who can only afford a studio apt, or a room in a shared house or apartment, or maybe have kids so there is no extra available room for work.)
Yep. Im a working writer and developmental book editor. I write off EVERYTHING
Thank you for this, Lincoln. I have been stressing about how taxes will work for me this year as it’s the first time I made over $600 for writing or podcasting. You have simplified it and made it less stressful.
The dedicated account and plastic card is a great tip because you dont have to go looking what expenses are business and what are not.
And for whomever uses Amazon, they offer a business discount if you add your info (Even a Paypal business card)
Don’t I Need an LLC or S-Corp to Be a Business?
Nope. If you are getting 1099 income from writing, you are a business regardless of whether you formalize this as an LLC or S-Corp. You count as a “sole proprietorship.” You file your business income on a schedule C form… although again I’d recommend a CPA.
there are HUGE ADVANTAGES TO LLC vs S-Corp. and this should be a YES, especially since some of us don’t have the book deals or royalties from anything because well. . . Borges.