How Do I File My Taxes?
If you make money from your writing, then the IRS considers that money self-employment income. All self-employment income is subject to federal taxes as well as self-employment taxes (ie. Social Security tax and Medicare/Medicaid tax). You may have already guessed that making money from writing just made preparing your tax return a lot more difficult.
Report all income and expense from your writing business on Schedule C. Because you are now self-employed, you can deduct expenses paid for writing against writing income in order to lower your tax obligation. You owe self-employment tax on the net amount of income derived from your writing ventures.
Self-employment tax is reported/calculated on Schedule SE.
The net income amounts and amounts of self-employment tax transfer to boxes on Form 1040 in order to complete your tax filing.
(see What Can I Deduct? for more information on business expenses)
© Jana DeLeon. All rights reserved.