How Publishing a Book Affects Your Taxes
Dec 08, 2023In our latest episode of Keep What You Earn, host Shannon Weinstein dives into a topic that may interest many aspiring authors and those who have already published books. The episode, titled "How Publishing a Book Affects Your Taxes," sheds light on the often confusing matter of how to treat the costs associated with publishing a book when it comes to taxes.
Shannon begins by addressing a common assumption: that the costs incurred in publishing a book would be a straightforward tax deduction. However, she explains that it's not as simple as it seems. She emphasizes the importance of consulting with your CPA or tax preparer to discuss and understand how to handle the costs associated with producing, publishing, marketing, and distributing your book.
The episode delves into two different scenarios. First, Shannon explores authors who use their books primarily as a marketing tool to establish credibility, generate buzz, and open doors for speaking engagements, media appearances, and more. In this case, the costs incurred would likely be classified as marketing expenses. However, there is a gray area to consider.
The second scenario focuses on authors who make a living solely from their books, earning royalties as their main source of income. For these authors, the treatment of the costs might lean towards considering them as assets that could be depreciated over time. Shannon explains the difference between expenses and assets, highlighting how the intent and long-term benefits of a book can influence its classification.
While she acknowledges that there is no definitive right or wrong answer, Shannon encourages authors to engage in a conversation with their accountant to determine the best approach for their individual circumstances. This open discussion allows authors to understand the tax implications and potential advantages of classifying publishing costs as either expenses or assets.
If you're an author or aspire to be one, this episode offers valuable insights that could potentially impact your bottom line. As always, Shannon's goal is to simplify complex financial matters and empower entrepreneurs with knowledge to make informed decisions.
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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn.
