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Posts Tagged ‘deductions for writers’

Tax Tips – BOOKS!

Posted by Range Officer Rhonda on November 29, 2009

One subject that is near and dear to all writers, editors and researchers are books. Although they are becoming, slowly, slightly overwhelmed by electronic media, books are still a vital part of our lives. How is THAT going to help on your taxes? This can be another long and lengthy subject but I will try to shorten my object lesson this time.

 First of all, ‘books’, per se, do not necessarily mean those large old dusty tomes of the past, although they are included. By books, I mean every single piece of printed [and now electronic] media. It could mean paperbacks, hard cover, books-on-tape, a bound essay or report, an e-book, newspaper, magazine, journals and newsletters. I could probably name a few more, but you get the picture.

 If you are a writer – then virtually everything you read is considered a ‘resource’. As you buy a book or periodical during the year, even if it is for pleasure reading, ask yourself this question: “Could I use even ONE sentence in this as an idea/prompt/quote/research for the pieces I write?” The majority, if not all, of the time the answer will be yes. I could read a Sci-fi book and like the way the dialogue works or the way the characters take turns telling a story – and use this as a lesson for how I want my memoir to appear. I could use a children’s story to pick up the moral for a romance novel. It all relates. Magazines, even pictures – provide prompts and, sometimes, research material.

 For the current year, every time you purchase any of the above [books, periodicals, e-media, etc], you can just save the receipt, or even better – pay for it with a credit card for easy tracking.  Notice the subliminal plug? Yes, Kitchen Table Stories is still available for purchase – visit www.Storycircle.org for details about the book. Back to the article: Add up all the charges, and at the end of the year – you have your total to use for current year purchases.

 What about older purchases, such as one year, two years – even twenty years? I may have mentioned this before; but there is a tax term called ‘placed in service’. If this is the first time you have ever written off books, you can go back and use older books and write them off as well. There are several methods of doing this and several methods of getting the value of the books. You can use them as a direct expense on the current year tax return, the next year’s tax return or amend a prior year tax return [up to 3 years back before the current year]. You can use a lump sum [say, $10,000] and capitalize it and write it off over a period of years. Your options need to be discussed with your tax preparer so that you get the best benefit of this write-off.

 Basically, the way you can get the write-off value of a book that comes from a prior year is to start by looking at the cover and the published date. If the book was printed in the past 2-3 years, then you would use the face value [or your cost] of the book. For older books, you can use the replacement value of the book or half the cover price. Generally, the suggested retail price is printed on the book [spine or by UPC code] in the case of paperbacks, on the front or inside the front page with the index & editor information [periodicals], or on the inside of the front fly leaf of most hard cover books. For an older book or a hard-cover book that shows no price, you can do a little research and see if the book is available on-line and that would be your ‘replacement cost’ or value of the book. For very old books, or out-of-print and rare books, I would get them appraised. These are going to be few and far in-between and on a case by case basis.

 One thing you DO have to be aware of: when you write off any printed material, you have to keep a record of each book you have written off for the required period of time that you must retain tax records – that is three years from the date you filed the return. You would not want to list a couple dozen books, write them off, then in a couple years use the same book and write it off again. For your own peace of mind [and your tax preparer] – make a list of the titles/authors of the piece you are going to use.

 One other short mention about books: give them away when you are done with them. Take them to your local library, to a school, a veteran’s home, a nursing home, or a charitable organization such as Goodwill, Salvation Army and churches. To get an idea of how you would value the books as a donation, use 50% of the face value. If your college books cost you $40 way back when – they are worth a $20 deduction to charity now. If your year subscription to National Geographic costs you [whatever they cost], use 50% of that price. Magazines – yep, you got it – half the cover price. This is called the ‘thrift shop’ or ‘comparable sales’ method for those of you who may prepare your own taxes and have tried to understand exactly what the software is asking you for.

 Okay, another real quick mention: books as gifts. If you buy books and give them out to family and friends as presents, you may write those off as well, even if you don’t read them yourself. Same with gift subscriptions. But that is a subject for another discussion, or something for you to talk over with your tax person. As always, these ideas are only general discussion/thinking topics and persons who may not be fully trained in the application of tax deductions as applies to your individual case should not use this information without first checking with your own tax preparer.

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