6 tax matters U.S. indie authors should consider

Once you’ve set up your self-publishing business – and especially if you expand it to be more than just an author collecting royalties – you’ll have to file additional tax forms beyond the 1040 if you live in the United States. The good news is you also qualify for some tax deductions, such as your home office and vehicle use. Let’s examine some of the aspects of business taxes that you should consider once you’ve published:

• Tax forms self-published authors must file 
As a published author, you’ll have to pay taxes on your earnings from book sales. If a self-published author in the United States, you are a self-proprietor, and that means you’ll need to fill out some additional forms with the IRS.

• Why self-published authors must keep records
Once you self-publish, you’ll need to bring all the meticulousness of your writing efforts to bear on your business records. That means never tossing a receipt and tracking them on income statements and balance sheets.

• Writers can deduct home office space on taxes
Most indie writers work out of their home rather than rent or own office space. Fortunately, expenses related to running a self-publishing/writing business out of your home can be deducted on Federal income taxes.
 
• Deduct start-up costs on Federal income taxes 
When starting a business so you can self-publish a book, you’ll likely need to purchase materials so you can write. These start-up costs are the expenses you incur before you actually begin business operations.

• Indie writers also can use depreciation on taxes
When you start or operate a business, you almost certainly will have to acquire equipment and other property. Even for indie authors who have very few business items – such as a desk and a computer – some of this can be deducted from your Federal taxes.
 
• Indie authors can deduct vehicle expenses
Indie authors can deduct the expense of operating and maintaining their car or truck on federal taxes should they use a vehicle to research their books.