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  Issue #18

Free Writers' Newsletter

 August 23, 2004  

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Simple record-keeping and tax deductions for writers
By Pamela S. Thibodeaux

So, you want to be a writer. Family encourage and support you. Friends pat you on the back and say: "great, maybe we'll see your name on the NY Times Best Sellers List." People envy your creativity, not realising that writing is hard work. Writing is more than creating the Great American Novel. Writing is a Business and a business requires record-keeping and tax preparation.

Many have already begun gathering information and getting things in order. Most will wait until the last minute then be in a panic. Don't be one of them. Be prepared.

Unpublished or new writers may be thinking "oh, I'm not published so I don't need to worry about that yet." Wrong. IRS rules state that you can claim a tax loss for business expenses even if you're unpublished.

Some will say that the rule applies for only up to three or five years, and that you must show a profit otherwise it is considered a hobby. Wrong! According to my tax advisor, the CPA's I've talked to and those I've worked with, the rule states that "as long as you can prove you are actively pursuing a career in writing" and as long as the expenses are considered "necessary business
expenses" they are deductible.

Besides, any writer that's been doing this for a while knows that until you are way up there on the list, you won't be showing a profit. Income, yes. Profit? No. Everything you get out of your writing, you'll put right back into it for things like advertising and promotion. And, yes, Advance Money is considered income. If you use it to enhance, advance or promote your work then chances are every penny you spend may be tax deductible.

Most writers will use a Schedule C or Profit and Loss statement to file their business tax. This form is found in your 1040 forms and instructions book or from your local IRS office. You can file a 1040 form with a Schedule C and still take standard deductions in lieu of itemising. Use your social security number and your name (unless writing under a pseudonym; then it's your name DBA (your pseudonym)). The "Principal Business or Professional Activity Code" (711510) is listed in your 1040 book under the Performing
Arts section.

How do you prove you're "actively pursuing a career in writing" and what are "necessary business expenses"? Here are a few examples:

1).Send letters to agents or editors. Keep a copy and staple their reply to your copy. Postage is deductible as well as return postage on your SASE. Do this via email? Print out a copy of your email query and their response. Not ready to submit yet? Send letters to prospective publishers requesting submission guidelines. Remember: keep copies for your records!

2). Buy writing-related books or subscriptions to internet sites such as firstwriter.com? These are all legitimate expenses. Office supplies (paper, ink, envelopes, business cards, etc.) are also valid expenditures. Have an office set up in your home for your writing? You may be able to write off a portion of your rent or house note and utility bills for the use of this room. Also, if you make any long distance phone calls that are related to your writing (critique partner, editor, agent, etc.) these calls are tax deductible, as are
internet service fees if you're using the internet to develop your craft and/or promote yourself and your work.

3). Join a writers group. Membership dues are tax deductible. Gas mileage is tax deductible when you travel to meetings or conferences, even if your vehicle is normally used every day. Meals are also tax deductible as long as the meal was business related.

4). Go to a writers' conference. Conference fees, hotel expenses, gas mileage and meals are all deductible expenses even for unpublished writers.

5). Have a website? Any fees related to the creation, development and maintenance of this website are tax deductible.

6). Take a vacation with your family. Combine this with a little networking by visiting the local writers group (if you know of one). Visit the library, museum, or any other place that you could claim as research. Talk to celebrities, authors and media about your book, even if it's not published. Collect business cards as verification that this was a "working" vacation. One other thing you might consider: do your children help you by doing research, proof reading, or taking on extra chores so that you have time to write? Their allowance may be deductible. You can pay for contract labour up to $600 per year without providing a 1099, and student income does not have
to be reported along with the parent's income!

7). Pay a housekeeper or babysitter so that you have time to write. All or part of this may be deductible.

**Be careful with these last two and always check with your tax consultant, but many of these are justifiable expenses even for unpublished writers.**

8). Pay a CPA or Tax Consultant to do your taxes? Pay for an evaluation or professional critique of your work? These are considered professional fees and services and are tax deductible.

When asked about paying the Temple Tax, Jesus replied, "render unto Caesar what is Caesar's but render unto God what is God's." Tithes and offerings off your writing income may also be deductible, if you itemise your 1040 or Schedule A deductions.

How do you keep track of all those expenses?

Spreadsheets and receipts. Keep receipts in a standard manila envelope or organized by category in a pocket sized file folder. Spreadsheets are easy to set up and easy to maintain. Most operating systems like Windows come with a standard spreadsheet application. One column (or page) for Income and one for Expenses. What about all those formulas? Simple. Most spreadsheets have
an Auto Sum feature for the addition of a column or you can manually do this by using the formula =sum(cell+cell) or =sum(cell:cell) for a range of cells. Need to subtract, divide or multiply? Formula would be:

=Sum(cell*cell) to multiply;=sum(cell/cell) to divide; and =sum(cell-cell) to subtract.

Published? Here are some additional items that can be written off as expenses:

1). Promotional expenses (brochures, flyers, press kits, press releases, etc. etc.).

2). Books donated to libraries or given away for promotional purposes (sent to Oprah, swapped with another author, donated for fund raisers, etc.) may be deducted at retail value.

3). Books bought for research.

4). Dry-cleaning those nice clothes you wear for speaking engagements, book signings or other author appearances.

5). Postage and/or shipping fees for books sent to wholesalers, retailers, readers, reviewers, etc.

6). Agent fees and commissions. Compare your royalty statement against your 1099 (Miscellaneous Income Statement). If the amount does not show royalties less agent fees and commissions those are tax deductible!

Self-Published or E-published and have to buy copies of your book to resale? Set up costs, cover art, and the charge for producing (or buying) the books are tax deductible! Occupational or Resale License fees are also deductible.

Remember, if it falls under "Necessary Business Expense" it is deductible!

Worried about being audited? Don't. Be careful and be honest. Claiming you bought a new boat to learn how to water-ski so that you can write about water-skiing will not cut it, but nearly everything else will fly, as long as you have the records to prove it; hence the value of good record-keeping.

It's never too early or too late to get organised for tax season. Remember, tax laws change yearly. For more information visit the IRS
website @ www.irs.gov or call them toll free at: 800-829-3676 and request publications such as # 334 (Tax Guide for Small Businesses and Individuals who use Schedule C or C-EZ), #535 (Business Expense – this guide tells you what you can and cannot deduct), and #552 (Record keeping for Individuals).

Pamela S. Thibodeaux is a member of Bayou Writers Group and ACRW (American Christian Romance Writers). Her writing has been tagged as "Inspirational with an Edge!" Visit Ms. Thibodeaux's website @ http://www.pamelathibodeaux.com or email her at: pthib-7@centurytel.net.

  

Books club sales in North America – increasing the odds
From Denise Hamilton, Ink Tree Ltd
www.inktreemarketing.com

What is a book club sale? It is actually a rights sale or a licensing agreement: you are granting permission to a book club the right to "borrow" your work. You have written a book, and now you are allowing a book club to print and distribute your book to its members.

You allow the book club to reprint your book in a specific language, in a specific format, for a specific period of time, in a specific geographic territory, to a specific group of people. You ensure in your contract that you maintain ownership of the copyright and of all other intellectual property rights, such as electronic, movie, other languages and territories, and serial rights – to name a few. Always seek good legal advice before signing a contract.

There are many book clubs, but most of the major clubs fall under the bookspan umbrella (www.bookspan.com). To find other book clubs that are appropriate for your book, do an internet search: on your browser, type in +(your book genre, e.g. cooking)+book+club.

The chances of having your book selected by a book club are roughly one in ten, which is really quite good. Imagine if your chance at winning the lottery was that great! It is important to know that book clubs are always looking for new ideas to entice their members, so if your book is well written and edited, has plans for professional graphic design, and demonstrates a unique slant on your topic, your chances of being selected rise considerably.

  • Tip #1 for increasing the odds: In saying that, it is important for you to know that the earlier you submit your book, the better.
  • Tip #2 for increasing the odds: Book clubs are much happier receiving a typed manuscript six to twelve months in advance of your publication date than receiving a bound galley or finished book close to the publication date. A book club likes to introduce your book to its members near your publication date in order to take advantage of the reviews and publicity that you will be generating when your book is launched. The bigger the media splash you make, the better everyone's sales will be. 
  • Tip #3 for increasing the odds: There are many categories of book clubs, so be sure to submit your title only to the appropriate clubs. Do not send your book to every book club that you can find. Each club's membership has specific interests so be sure to submit your book only to clubs that might buy – you will again increase your chance of being selected.
  • Tip #4 for increasing the odds: For instance, if you have a humour book, it's unlikely to be of any interest to a cooking club or to a mathematics club. If your book is regional, it will not likely appeal to a general interest book club, so submit that regional title to suitable specialty clubs. 

There are rules to follow when submitting your book to the book clubs, so following them carefully should avoid unnecessary rejections. 

  • Tip #5 for increasing the odds: Follow the rules:
1. Send your manuscript to the Editorial department at the appropriate club(s).

2. Include a cover letter that details the following information:

  • summary of the book contents;
  • description of the book (size, binding, hard/soft cover, black & white or colour);
  • expected selling price;
  • number of pages;
  • number and type of photographs and/or illustrations (indicate if black & white or colour);
  • notation if the book will be part of a series;
  • which volume the book is in an existing series and a sales history of the series;
  • intended publication date; and
  • plans for publicity and promotion, and your intended budget.

3. Include a brief author biography written in the third person. Be sure to talk about any previous books published and their sales histories.

4. Send photocopies of some of the illustrations and photographs. Do not send original copies – they will not be returned to you.

5. Don't forget your contact information and website if you have one.

Unfortunately, you cannot contact book clubs to follow up on your submission. It's a case of "Don't call us. We'll call you". Book clubs
receive too many submissions to allow follow up calls or letters. If they are interested, they will call you, usually within two to six months.

Do you think that a book club sale is worth pursuing? Absolutely! For very little effort you can achieve the sale of thousands of copies of your book. You will likely be paid a minimum sum per copy, but you will also not have any production costs, and a small sum multiplied by thousands can equate to a very nice cheque. Your only effort will be to sign a contract, provide your book on disk and collect that cheque – and just think of the free publicity! Thousands of book club members will read about your book. You can't buy that kind of publicity!

Article courtesy of Ink Tree Ltd.
www.inktreemarketing.com
info@inktreemarketing.com
Phone: 1-403-295-3898
Fax: 1-403-730-3492

Copyright 2004 Ink Tree Ltd.

  

A new era in fantasy sports begins

St. Louis, MO – July 19, 2004 – realising a need within the fantasy sports community, Asylum Fantasy Sports and Fantasy Sports Publications have partnered together to establish the Fantasy Sports Writers Association (www.fswa.org).

For far too long, fantasy sports writers have been treated as second class citizens within the writing community. Given the astounding growth of the fantasy sports industry, the FSWA believes that the remarkable efforts put forth by fantasy sports writers deserves to be acknowledged. As such, the Fantasy Sports Writers Association is the first ever organisation to recognise and promote sports writers exclusively in the area of fantasy sports.

The FSWA Executive Committee will consist of the following members:

President: Ryan Houston, Asylum Fantasy Sports, LLC
Vice President: Emil Kadlec, Fantasy Sports Publications, Inc.
Secretary: Bob Harris, Fantasy Sports Publications, Inc.
Treasurer: Kirk Bouyelas, Asylum Fantasy Sports, LLC

The FSWA Board of Directors will be filled with some of the biggest names in the sports industry. They include:

James Quintong, Sports Illustrated
Scott Engel, ESPN
Brendan Roberts, Sporting News
Matt Pitzer, USA Today
Tristan Cockcroft, CBS Sportsline
Mike Harmon, Yahoo Sports
Rick, Kamla FanBall

The mission of the Fantasy Sports Writers Association is to provide a voice for writers in the arena of fantasy sports. The FSWA will function as an advocate for fantasy sports writers and strive to promote and acknowledge the hard work and dedication shown by fantasy writers throughout the industry.

The Fantasy Sports Writers Association will also provide its members with both opportunity and acknowledgement through the following initiatives:

  • Classified Ads: the FSWA will feature classified ads to match both writers looking for employment and companies looking for writers.
  • Networking: the FSWA affords members the opportunity to contact, meet and network with other esteemed members of our group.
  • Grants: the FSWA will provide grant(s) to aspiring young students who are looking for opportunities in sports journalism.
  • Awards: The FSWA will present yearly awards to writers from each fantasy sport, to acknowledge their contributions to the industry.

The Fantasy Sports Writers Association ~ Promoting journalistic excellence in fantasy sports. Enquiries or questions can be sent to Mr. Ryan Houston @ rhouston@fswa.org.

Contact:
Ryan Houston, President
Fantasy Sports Writers Association
www.fswa.org
636-293-9484
636-294-7021 (Fax)
webmaster@fswa.org

  

Resources for writers at firstwriter.com

Visit firstwriter.com for the following invaluable resources for writers:

To advertise on this newsletter for as little as $30 / 20 click here

 
In this issue:

News:

Annual mystery contests
Futures Mysterious Anthology Magazine, one of the leading mystery
magazines with  national distribution, is running two annual mystery
contests.

Fire to Fly Contest:
Themed contest, open to reprints. Themes are:
1. Forensic, CSI Crime
2. Holidays are Criminal
3. Historical Crime
4. Crimes mixed with Horror
5. Crimes of the Spirit (ghosts, supernatural, etc.)
6. Crimes with Techno Gadgets (internet, cell phones, etc.)

Deadline: September 30, 2004.

Slesar's Twist Contest:
Named in honour of Henry Slesar, dubbed "Master of the Ironic" by Alfred
Hitchcock. Henry Slesar was the renowned author of classic twist stories.

Write your story with a twist, original work only.

Deadline: October 15, 2004.

Prizes for both contests include cash and possible publication in one of
mystery's greatest annual anthologies.

For more information and guidelines, check http://www.fmam.biz.

For the details of over 150 other writing competitions, click here

New literary journal calls for submissions
A new literary journal, VOX, is calling for submissions of prose vignettes and poetry. Short plays of exceptional quality may also be considered.

The magazine is looking  for originality. No workshop conformity, watered down Dada and Surrealism, or greeting card verse. Rhymed verse is discouraged unless exceptional.

Three to five poems, or up to three short pieces under 1000 words, should be sent with a cover letter and SASE to: VOX, PO Box 527, Oxford, MS 38655, United States; or by email to Voxjournal@
hotmail.com
(no attachments).

For details of more than 300 other magazines click here

Literary agency scam
Following our article, "ST Literary Agency – writers' break, or just crooked?" (fwn 17, August 4, 2004), we have received a report of another agency not charging a reading fee, but making an up-front charge for representation.

"New Elite Literary Agency" are alleged to make a $90 charge for representation, and are also alleged to be reluctant to engage in any kind of contact after signing an author.

fwn cannot refute or confirm this speculation, but advises authors to tread carefully.

For over 500 literary agencies – including those affiliated to official industry bodies – click here

Website contributor clinches book deal
Footsteps to Oxford is a website for writers, established just over a year ago, which offers aspiring writers the chance of publication, without the fear of rejection. Footsteps to Oxford accepts all contributions, and aims to act as a launch pad for writers' careers.

They recently realised this goal through Cleveland Gibson, one of their earliest contributors, who has now been offered a three-book deal.

The site charges no fees (though appreciates voluntary 5 donations to its running costs) and can be visited at footstepstooxford.co.uk.

Author seeks interviewees
An author is seeking residents of Australia, New Zealand, England, Ireland, South Africa, China, Taiwan, or Italy, to take part in an email or phone interview for the new edition of their book, 125 Ways to Meet the Love of Your Life (Hannacroix Creek Books, Inc., 2004).

Interviewees may be singles relating their efforts to find that special someone, or couples who already have; may be male or female; and may be named or remain anonymous as they wish.

Interested parties should email jyager@aol.com (no attachments), ensuring to include the following information: Name, Age, Occupation, Marital status, City & Country currently residing in, e-mail address, Phone: office and/or home number (including country code, city code, + number). 

  
firstwriter.com 2004
While every effort is made to ensure that all information contained within this newsletter is accurate, readers are reminded that this information is provided only as a collection of potential leads that the reader should follow up with his or her own investigations. Unless otherwise stated, firstwriter.com is not associated with and does not endorse, recommend, or guarantee any of the organisations, events, persons or promotions contained within this newsletter, and cannot be held responsible for any loss incurred as a result of actions taken in relation to information provided. Inclusion does not constitute recommendation.