Freelance Authors/Writers

[Gretel]

There was a post not too long ago that I wanted to hijack but can't find it any longer. In a nutshell it stated that writers are exempt from UNICAP and all expenses are deductible as incurred independent of actually receiving income. A lot of the books nowadays are sold through Amazon and similar sources and no books are actually printed. No problem here. But if books are actually printed I assume inventory needs to be kept and the cost of printing the books will be deductible only prorated. I couldn't find anything, could someone please confirm? Thanks,

[TaxGuyBill]

are exempt from UNICAP and all expenses are deductible as incurred independent of actually receiving income.

The rule is that if the business income is less then $27,000,000-ish, that you have the option to treat Inventory as "Non-Incidental Materials and Supplies".

The rule for deducting "Non-Incidental Materials and Supplies" is that you deduct the cost when the item is used or consumed ... pretty much like Inventory.

https://www.irs.gov/publications/p538#en_US_202112_publink1000270704

https://www.law.cornell.edu/cfr/text/26/1.162-3

[Snaggletooth]

Employee expenses are generally now allowed anymore. But for a select few occupations, employee expenses are deductible as an "adjustment to income." Writers are one of those few occupations.