Tag Archives: Schedule C

What will the IRS Say?

I’m going to get my taxes done today. I’m nervous. For many years, my husband, who was a professional tax preparer, did my taxes. He didn’t much understand the writing business, but he did understand taxes and the laws for small businesses. When he became incapacitated, I started doing my own taxes with Turbo Tax.

For years, I scrawled my income and expenses them into a book and gave Fred the totals to put on my Schedule C when he started nagging me in January. I knew all about checking the ending mileage on the car and adding up all the money I spent on books, office supplies, Internet fees, travel, etc. I graduated to spread sheets, but the categories remained the same. I have had a separate office for my writing most of my adult life, but I didn’t claim deductions for “office in the home” for two reasons: Number one, it’s a hassle and an audit magnet and number two, most years, I already had a big enough gap between writing income and expenses.

For 2011, the gap is even bigger. I get a little nuts when people assume that I could possibly have functioned normally last year. My husband died. That kind of knocks you into another dimension for a long time. I also self-published a new book and reprinted another, so the numbers look bad. Will the IRS decide my writing is a hobby? I have income and expenses and records going back 40 years to prove that it’s not. Can I just not mention my writing at all this year and forget about the deductions? Nope, I have income that I have to declare. Just not enough to make a profit.

I’m counting on what I have always heard and what was recently affirmed this month in an article in Poets & Writers by Jennifer Wisner Kelly: if you can prove you’re seriously trying to sell your writing, they will accept your claim that your writing is a business, not a hobby.

 As is probably true with all but the most successful writers, the whole writing business is just a small portion of what the IRS will be looking at. I tend to fixate on the writing numbers, but someone else will look at the bigger picture and shrug off the writing numbers as insignificant compared to the income we received from other sources and the money we spent on things like our house and medical expenses. This time, as much as it bruises my ego, I hope that’s the case. I did the best I could in a tough year, one which followed several tough years when Fred was in a nursing home. Now, in 2012, I’m starting over. I don’t really care how that looks to the IRS. I hope they don’t care either

 Stay tuned to find out how it goes.

 

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