Filing Schedule C and Writing Off Expenses for Your Author Business
A comprehensive guide to tax deductions for self-employed writers (for enterprises of all sizes and income levels)
Important: I’m not a tax pro, accountant, or lawyer—just a small businessperson who has been preparing and filing my own Schedule Cs for over 25 years. This article shares what I’ve learned from my own research and experience, but it’s not meant to be comprehensive or exhaustive. Tax rules change and your circumstances may be different, so please consult a qualified tax professional for advice tailored to your specific needs.
What Is Schedule C?
Schedule C (Profit or Loss from Business) is the IRS form that self-employed authors—whether that is full-time, part-time, or very part-time—use to report their income from writing and other business activities and business expenses on their personal tax return. Whether you’re self-published, traditionally published, or a hybrid author, if you’re earning money from royalties, advance payments, rights sales, or other activities as an independent contractor (events fees, consulting, ghostwriting, freelance editing, etc.) rather than as an employee, you’ll typically file a Schedule C.
This form allows you to deduct legitimate business expenses, reducing your taxable income and ultimately lowering what you owe in taxes. The net profit you calculate on Schedule C is subject to both income tax and self-employment tax (covering Social Security and Medicare), making it essential to track and claim all eligible deductions throughout the year.
Below I provide some general tips and more information on categories of expenses.
Essential Tips Before Filing Schedule C
Ideally, you’ll come to understand Schedule C preparation as a year-round process rather than a tax-season scramble, but if you’re reading this in tax season and realizing you haven’t tracked much, you can still pull together what you have for this year and commit to better systems and practices going forward.
Record-Keeping & Documentation
Keep business and personal expenses separate, and this is best achieved with a dedicated bank account and, if desired, a business-specific credit card for author expenses. (To whatever extent, you have a business as an author and you should act as such.)
Document in a dedicated notebook or computer file the business purpose of expenses, especially for items that could be questioned (like meals, travel, or gifts) and how you arrived at figures (such as when you use a percentage of your home as a workplace/business office).
Create a folder on your computer labeled something like “Business Expenses – 2025.” Inside that folder, create 12 more folders, one for each month of the year. Rather than keeping a mix of paper and electronic receipts, take a photo of every paper receipt and once a month move all photo receipts into that month’s folder. You can move electronic receipts to the appropriate month as you receive them.
Save contracts, royalty statements, and 1099 forms that prove your income in one accessible spot.
The Hobby Loss Rule
The IRS has a “3 out of 5 years” rule mandating that you should show a profit in at least three of the last five years to avoid being classified as a hobby rather than a business (you can deduct expenses for businesses, but not for hobbies). However, newer authors can still deduct expenses while building their business—just be prepared to show that you’re operating with a profit motive, i.e., you have a business plan, take a professional approach, have thoughtful marketing campaigns. Even better, you use the Profit First method.
Estimated Quarterly Taxes
If you expect to owe $1,000 or more in taxes for any given year, you’ll likely need to make quarterly estimated tax payments to avoid penalties.
This is especially important as there’s no employer withholding taxes from your author income. You need the discipline, fortitude, integrity to set the government’s share aside on your own. Again, the Profit First method helps tremendously in this regard.
Deduction Standards
Expenses must be “ordinary and necessary” for your author enterprise, but if you are new to business, you may be surprised at the extent of what’s deductible. See below.
You can only deduct the business-use percentage of mixed-use items (e.g., home office, vehicle, mobile phone plan).
When to Get Professional Help
Consider consulting a tax professional if your income is substantial, you have complex deductions, or you’re unsure about classifications
Finally, even if you don’t do your taxes yourself, read through the following dive into types of eligible expenses so you can keep proper records and receipts for your accountant or the person in your home who does your household’s taxes.
More tax questions? Join next week’s free Zoom call.
Expenses
Part II: Expenses of Schedule C is where you deduct the following business costs:
Advertising - Awards fees and submission costs, booth and event fees (including decorations, refreshments, and setup materials), giveaway expenses (books, swag, prizes for contests and reader giveaways), print and online ads (Amazon Ads, Facebook/Instagram ads, BookBub featured deals, newsletter advertising like Written Word Media or Fussy Librarian), digital promotion costs, co-op marketing costs, and blog tour expenses. Promotional supplies include brochures, flyers, business cards, mailers, stickers, bookmarks, postcards, magnets, tote bags, pens and other branded items, easels, banners, retractable stands, table coverings, signage, packaging, and graphic design services for promotional materials. Marketing services and tools such as publicist fees, PR campaign expenses, social media management services, influencer collaborations, paid book reviews (like Kirkus Indie or Publishers Weekly Select), promotional email blasts, reader magnets and lead generation costs, ARC (advance reader copy) distribution expenses, book trailer production and promotion, and advertising consultants also belong here.
Website expenses related to marketing—such as landing page builders, sales funnel software, SEO services, website design specifically for promotional purposes, and paid plugins or themes for selling or marketing—go in this category, while basic website hosting and maintenance typically fall under Office Expenses.
Also include costs for book launch parties or virtual events, street team coordination expenses, newsletter swaps or cross-promotion costs, podcast advertising, radio spots, and any sponsorships or partnerships where you’re paying to promote your books.
If the expense is directly intended to attract readers, sell books, or promote your author brand or business, it belongs in Advertising.
Car & Truck Expenses - Mileage for business trips (to post office, book events, research locations, meetings with agents/editors) using either the standard mileage rate or actual expense method. Keep a notebook in your vehicle or track on your phone. For public transporation and ride share expenses for business trips, put under Travel.
Commissions and Fees - Agent commissions, payment processing fees (PayPal, Stripe), platform fees, copyright registration fees, bank fees on business accounts. Some of these things can also be filed as an Office Expense. As long as you would be able to justify it in the event of an audit, selecting a reasonable category is fine.
Contract Labor - Payments to freelancers and independent contractors (editors, cover designers, formatters, virtual assistants, publicists, social media managers, beta readers you pay, photographers, audiobook narrators). Anyone you pay $600+ in a year should receive a 1099 from you. 1099s!? Don’t panic. Learn how to do it once and you’ve got it (or have a bookkeeper do them for you).
Depletion - Not applicable to most author businesses (used only for natural resource extraction).
Depreciation - This is for expensive equipment (think over $2,000: computers and accessories, cameras, furniture, podcast equipment) that lasts multiple years; you can deduct a portion each year rather than all at once. There is an elaborate form to fill out and tables to consult to figure out permitted deductions and alloted depreciation time.
As an alternative, there’s the Section 179 deduction that gives you the option to deduct the full cost immediately for qualifying items (for a total over something like a million bucks). Depending on how much you make in any given year, there is a strategy to this, so take a moment to read the rules, Google advice, watch a YouTube video, or consult a pro. BUT, do not avoid because it seems icky and tricky. It’s worth it.
Insurance (non-health) - Business insurance. (Note that self-employed health insurance premiums are deductible, but not on Schedule C. They go on Schedule 1 of Form 1040.)
If you’re a newer author working from home, doing mostly online marketing, with minimal in-person events and modest income, insurance may not be an immediate priority—but be sure to reassess as your business grows.
Consider getting general liability insurance (typically $300–500/year), possibly a bit cheaper through the group rates of a membership organization like the Authors Guild, once you 1) do regular public events, 2) make enough/are visible enough that you could be a target for a lawsuit, and 3) are required to have, as if by a venue or contract. This is not the sum of insurance issues for authors, just the beginning (look up E&O and business property insurance if these are relevant to you).
Interest (mortgage, other) - Interest on small business loans, lines of credit, and business credit cards; the portion of your mortgage insurance that applies to the percentage of your home used for business.
Legal and Professional Services - Anything you paid lawyers, accountants, tax preparers in the course of your author/business activities, including pre-paid and subscription legal services. Put expenses for accounting software/subscription services (like Quickbooks) under Office Expenses.
Office Expenses - Recurring services, subscriptions, and digital tools necessary to run your author business: software and subscriptions include word processing (Microsoft Word, Google Workspace), design tools (Canva, Adobe Creative Cloud), project management (Asana, Trello, Notion), accounting and bookkeeping software (QuickBooks, FreshBooks, Wave), email marketing platforms (Mailchimp, ConvertKit), cloud storage beyond free tiers (Dropbox, Google Drive), password managers, video conferencing (Zoom, Skype), file transfer services, and invoicing tools. Communication services cover business phone lines, VoIP services, answering services, and virtual receptionists. Website expenses that aren’t advertising-related go here: domain registration and renewals, website hosting, SSL certificates, content management systems, website maintenance, and tech support. Author-specific tools include writing software (Scrivener, Ulysses), editing tools (ProWritingAid, Grammarly, AutoCrit), stock photo and music subscriptions, and citation or reference databases. Additional office services include time tracking software, data backup services, postal services beyond basic P.O. boxes (mail forwarding, virtual office addresses), computer and equipment repair and maintenance, and internet service (business portion if working from home). Keep documentation of all subscriptions and recurring charges—credit card or bank statements work well for this—and be sure to cancel any services you’re no longer using before the next tax year to avoid deducting expenses that don’t benefit your business.
Pension and Profit-Sharing Plans - Contributions you make as an employer as employee benefits. Retirement contributions for the self-employed for themselves are handled elsewhere (Schedule 1).
Rent or Lease (vehicles/machinery/equipment; other property) - Office space, co-working space, storage units as for book inventory, p.o. boxes, virtual addresses, meeting space, venue rentals, dedicated business parking space (you have one, right? 😂).
Supplies - Consumable items: Office supplies include pens, pencils, markers, highlighters, paper, scissors, notebooks, printer ink and toner cartridges, file folders, binders, sticky notes, paper clips, staplers and staples, rubber bands, envelopes, labels, postage stamps, tape, lightbulbs, calendars, bulletin/white boards; desk organizers, and batteries for office equipment; packing and shipping materials like boxes, padded envelopes, bubble wrap, packing tape, box cutters; and shipping labels used for mailing books or promotional materials; cleaning and bathroom supplies for your office (home or other), such as paper towels, disinfectant, trash bags, hand soap, toilet paper, and air fresheners; meeting/event/breakroom supplies like refreshments, coffee, tea, bottled water, sugar, creamer, cups, napkins, and plates can be deducted; and first aid supplies. Keep receipts for all supplies purchases, and if you buy supplies in bulk for both personal and business use (as from CostCo), only deduct the business portion.
Taxes and Licenses - Initial and annual LLC filing fees, assumed name filing fees, business liceneses and renewals, corporate filing fees (if you’re incorporated as an S-corp or C-corp), annual report fees for your business entity, registered agent fees (if required for your LLC/corporation), professional licenses and related costs, seller’s permits or resale certificates (if selling books directly), local business permits or vendor licenses, event permits (if hosting public events), special permits for public performances or readings, state and local business taxes, personal property tax on business equipment, real estate tax on business property (the business portion if you have a home office).
Note: Not deductible are: federal income tax, self-employment tax (not deductible on Schedule C, though half is deductible on Schedule 1, SCORE!), sales tax you collect from customers (you’re just passing it through to the state), nor are any penalties or fines (e.g., IRS late fees, parking tickets, overdue library books).
Travel and Deductible Meals - In-town transportation costs (gas, parking, public transist, cabs/rideshares) for business purposes; out-of-town transportations costs for business purposes (bus/train/airplane tickets); hotel costs (including wifi); dining costs; tips.
You should also know about per diems: daily permitted deductible allowances for meals and incidental expenses (tips mostly…lodging/dry cleaning/wifi fees can be deducted elsewhere) when traveling for business, instead of tracking and deducting actual meal costs. The IRS publishes standard per diem rates that vary by location—higher rates for expensive cities, lower rates for rural areas. This means, for example, that instead of saving every restaurant receipt while attending a three-day conference in New York, you’d use the IRS per diem rate for NYC and multiply it by the three.
Keep per diems in mind for multiple-city book tours, research trips, conferences, and extended writing retreats or residencies.
You can only use per diems for overnight business trips (not in-town events or day trips).
Per diem rates are for full days at your destination. You can deduct 75% of the published per diem for travel days to and fro. (This is nice…used to be 50%.)
The IRS publishes rates annually—you can find them at gsa.gov (for U.S. travel) or on the IRS website (for foreign travel)
Document the business purpose, dates, and location of travel for future reference.
You can choose either the per diem or actual expenses paid method, but not both for the same trip. You can strategically select one method over the other for different trips.
You should always look up the per diem rates; many authors, used to being quite thrifty, would be surprised at the amounts allowed.
Utilities - Utilities necessary to operate your business space: Cell phone service (deduct the percentage used for business—if you use your phone 60% for author business and 40% personally, deduct 60% of the bill), landline phone service if you maintain a separate business line (100% deductible), and internet service (deduct the business-use percentage if working from home). If you qualify for the home office deduction using the regular method (not the simplified method), you can include the business portion of electricity, gas, water, sewer, and trash collection services.
To calculate the business percentage for utilities in a home office, use the same percentage as your home office space—for example, if your dedicated office is 10% of your home’s square footage, you can deduct 10% of these utility costs. However, if you use the simplified home office deduction method ($5 per square foot), utility costs are already factored into that calculation and you cannot deduct them separately.
If you’re renting dedicated office or studio space outside the home, you can deduct 100% of the utilities for that space if they’re billed separately from rent.
Wages - Wages you pay to W-2 employees if you have them.
Other Expenses
Legitimate business expenses that don’t fit neatly into the predefined Schedule C categories are considered Other Expenses and are listed separately, with amount totals, on the back page of Schedule C, in Part V. Be specific. Always in my Part V are book printing expenses.
Other common things for authors may be books and research materials (craft books, comp titles, reference materials, research subscriptions); education and professional development (courses, conferences, workshops, books, Substack subscriptions 😉, coaching programs related to writing craft or business skills); industry memberships and professional dues (Authors Guild, National Writers Union, genre-specific professional associations, your local writers groups); ISBN and similar industry- and production-specific purchases; gifts for business contacts (limited to $25 per person per year); and any specialized equipment or services unique to your author business that don’t fit elsewhere. As always, document your reasonings for future reference.
Home Office Deduction
If you have a dedicated space in your home used regularly and exclusively for your author business, you likely qualify for the home office deduction, which can significantly reduce your tax obligation. Regularly (not just occasionally) and exclusively (not a dual-purpose guest room/office) are key.
You have two methods to choose from: the simplified method and the regular method. The simplified method allows you to deduct $5 per square foot of your office space, up to 300 square feet maximum (for a maximum deduction of $1,500). Measure your office (length x width of each rectangular portion), multiply by $5, and you’re done. Utilities, repairs, and depreciation are already factored into that $5 rate so do not deduct for those elsewhere.
The regular method requires more record-keeping but may yield a larger deduction. Calculate the percentage of your home used for business (office square footage plus any storage space used to hold books and supplies divided by total home square footage), then apply that percentage to eligible home expenses: mortgage interest or rent, property taxes, utilities, homeowners or renters insurance, and repairs and maintenance. If your office is 100 square feet and your business storage takes up 50 square feet (150 square feet total) and your home is 1,500 square feet, your office is 10% of your home, so you’d deduct 10% of those expenses. Note that for total home square footage, use the number from your property tax assessment, real estate listing, or measure each room and add them up. You don’t include unfinished basements, garages, or porches in the total square footage unless they’re finished living space.
You can’t switch between methods from year to year for the same home, so choose carefully. Most authors with smaller offices or those who want simpler record-keeping prefer the simplified method, while those with larger dedicated spaces or high home expenses may benefit more from the regular method. Report the home office deduction in Part II of Schedule C for either method, attaching Form 8829 if you use the regular method.
Part III: Cost of Goods Sold (COGS) and Inventory
If you maintain physical book inventory that you sell directly to readers (such as self-published authors who purchase print copies in bulk or traditionally published authors who buy books from their publisher at author discount for resale), you’ll need to complete Part III of Schedule C. If all of your books are print-on-demand, ebooks, or audiobooks, you can skip this section.
Cost of Goods Sold represents the direct costs of producing or acquiring the products you sell. For us authors, this primarily means the cost of purchasing or printing books. This is different from other business expenses because you can only deduct the cost of inventory in the year you actually sell it, not when you purchase it.
Here’s how it works: report your inventory value at the beginning of the year, add any purchases of books or materials made during the year, subtract the value of inventory remaining at the end of the year, and the result is your Cost of Goods Sold—the amount you can deduct. For example, if you started the year with $1,000 worth of books, purchased another $3,000 in books during the year, and ended with $1,500 in unsold inventory, your COGS would be $2,500 ($1,000 + $3,000 - $1,500).
You’ll need to conduct a physical inventory count at year-end and value it at cost (what you paid for the books, not retail or wholesales prices you charge). If you use accounting software—which you should at this level—you can reconcile these numbers once a year (physical inventory vs. what your software says you have on hand).
Items that go into COGS include printing costs for physical books or the wholesale cost of books purchased from your publisher or printer. (Just to be clear, things like ebook production costs, cover design, editing, formatting, and ISBNs are not inventory costs—these are regular business expenses that go in Part II under the appropriate category.)
Part IV: Information on Your Vehicle
If you’re claiming Car & Truck Expenses in Part II of Schedule C, you must complete Part IV to provide details about your vehicle usage. Here you answer specific questions about your vehicle and document the business versus personal use, things like the date you placed the vehicle in service for your business, the total miles driven during the year, the miles driven for business purposes, the miles driven for commuting (driving between your home and a regular workplace—not you if you have a qualifying home office), and miles driven for other personal purposes.
The IRS wants to see your business-use percentage, which you get by dividing business miles by total miles. For example, if you drove 15,000 total miles and 6,000 were for business, your business-use percentage is 40%. You also answer yes/no questions: Do you (or your spouse) have another vehicle available for personal use? Was your vehicle available for personal use during off-duty hours? Do you have evidence to support your deduction? Do you have written evidence?
It’s critical that you keep a mileage log as you go and do not reconstruct/guess them later. Your log should include the date, destination, business purpose, and miles driven for each business trip. You can either use mileage tracking apps (MileIQ, Everlance, TripLog) or keep a little notebook in the car.
The Bottom Line on Deductions
From now going forward, the trick to maximizing your legitimate tax deductions is thinking like a business owner year-round. Every expense you incur for your author business—from the obvious (editing and cover design) to the easily overlooked (mileage to the post office, craft books, conference registration, the sheer extent of office supplies)—should be documented and categorized as the money is spent.
When in doubt about whether something qualifies as a business expense, ask yourself: Is this ordinary and necessary for operating my author business? Would I have spent this money if I weren’t pursuing writing professionally? If I weren’t an author entrepreneur? If the answer is yes to the first and no to the second, it’s likely deductible. Proper documentation and note-taking protects you in an audit and ensures you’re not leaving money on the table by forgetting to claim legitimate expenses when tax season arrives.
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