I recently met a twice published author who wasn't taking advantage of what the IRS allowed. I worred there might be more of you out there.

When speaking to Cynthia recently, the subject of taxes came up and I was shocked that she didn't know the deductions allowed as a published author. These are deductions against her earnings from her publisher. She didn't know for instance, that printing paper, printer ribbons and postage were deductions when you submit your manuscript through the mail. Even mailing envelopes are included as a deduction. Whereas electonic submissions such as I make are not allowable. Printer paper, ribbons, mailing envelopes and so on are listed under supplies. I keep a separate list for postage.

If your computer or printing equipment has to be replaced, that expense is a tax deduction because you use them for work as an author. And each year the equipment can be depreciated as another deduction. These are listed under equipment.

Phone calls specifically to publishers and agents are tax deductible. Travel expenses for anything related to your writing is also deductible. But be certain to keep track of mileage because the IRS gives credit for mileage only; not the filling up of your tank. Bridge tolls, motel bills, expenses for meals--if part of a business trip, are covered. But you need to keep receipts.

On my personal IRS Form, I file a Schedule C and a Schedule SE to show my writing income and expenses. Even if you use a pseudonym, publishers use your Social Security number to report earnings. Therefore, you would list yourself as John Smith (your real name) AKA your pseudonym, and your occupation as author, writer, novelist or whatever reference you use to earn money. In this section you can also deduct the 10 or 20% fee your agents deducts from your checks.

At this point, I would suggest using a tax service as I now do because deductions are sometimes a gray area. Now, for instance, you can only claim the expenses on the one room in your house used for writing if you don't work out of an office. That means: if you have a six room house, you divide your yearly homeowner expenses by 6, and that 1/6th is the deduction allowed. See what I mean. It grows more complicated each year. And to make certain you're being treated fairly, and that you're not following rules for deductions set up years ago that have now changed, get professional help.

But DO keep records of those expenses. Your accountant will thank you.