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Posted by BR on January 15, 2007, 2:07 am
Please log in for more thread options Paul Thomas, CPA wrote:
>> By day, I work at a high-tech company (as an employee to the
>> company), but by night, I write fiction on my own. I am
>> currently trying to sell my novel and I have made little
>> money at my fiction writing (a few awards and story
>> publications here and there), but I'm wondering if I could
>> consider this a business over the next year. Can I consider
>> myself a sole proprietor?
> That is what you would be, a self-employed writer. You'd
> have to tighten up your records though, not only to prove
> the expenses, but that your activity is being done with the
> intent to turn a profit.
>> What are the laws with regard to this?
> Same for any self-employed person.
>> Can I lose money as long as
>> I'm trying to make money?
> To a degree, yes. Economics kicks in after a while and you
> have to give up the sinking ship.
>> Can I write off expenses with
>> regard to this endeavor?
> Yes. Be aware though that having large business (writing)
> expenses being deducted against ordinary income draws
> attention. If you get audited, you might be on the hook to
> prove your profit motive.
Usually, you get 5 years to start making a profit, before
the IRS considers it to be a "hobby" rather than a bonafide
business. Corrections invited.
--
Remove the TOS star ship captain to reply.
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