As an indie author, it’s important to think of yourself as a business. Taxes for 2016 are almost due, so here are some tips that can help you file.
The first step is to gather all tax-related documents. This can include, but is not limited to:
- Student loans
Having all your documents in one place will make it easier to file, and you’re less likely to accidentally miss anything. You can use these documents to help you itemize your deductions.
BookWorks has a partial list of items you can deduct, which include office supplies, business meals, and promotional events. It may also be possible to deduct advertising expenses, such as business cards, Facebook ads, or sponsorships, as well as any travel you did for business, which could include the cost of renting a car, hotel expenses, and parking fees. And don’t forget office space. If you work from home, and your office space takes up 20 percent of your living space, you can potentially deduct 20 percent of your monthly mortgage or rent. However, make sure that your office space is exclusively used for business.
Intuit TurboTax has another list of things you can deduct, such as some medical expenses, charitable gifts, and even some education. This last item is called the Lifetime Learning credit, which “can provide up to $2,000 per year, taking off 20 percent of the first $10,000 you spend for education after high school in an effort to increase your education.” Note that this doesn’t apply at higher income levels.
For any easy way to keep track of all your expenses throughout the year, you can try Intuit QuickBooks’ business expense tool. It allows you to track every purchase, and categorize them.
There are also a number of products that can help you accurately and efficiently file your taxes. These include Tax Act, Turbo Tax, and H&R Block.
Each of these products have different pricing tiers, so you will want to compare them to see which best fit your needs. These products will walk you through all the steps to file both state and federal taxes. And the best part is, the software is tax deductible for next year.
Please note I’m not a lawyer or an accountant, and these tips are not official tax advice. That said, do you have any additional tips to share? Please let us know in the comments!
Editor’s note: This post was originally published August, 2017