Writer's Mom

Hi June,

My question is about a new business venture of my son's. This spring he will graduate from college here in the Twin Cities with a degree in creative writing. He hopes to one day become a novelist or comic book author who can support himself via this trade. In the meantime he has discovered an interesting business. He creates funny video reviews of bad comic books written by others.

These reviews are posted on sites that include advertising with the video, and then he is paid by the advertising revenue that is generated. He isn't making enough money to live on (yet) but it is possible he will be making enough to support himself sometime in 2009.

My question is this: he spends approximately $40/month on comic books. He has been doing this for years due to his interest in the medium. But it seems to me that at least a part of that expense is now a legitimate business expense. I'm trying to figure out what is reasonable. He has to buy a comic book and read it before he can determine that it is a good book for review (not all of them are). So should he only include the comic books that he makes into reviews? Or perhaps he should avoid claiming any of it as an expense as the IRS will probably think it is too odd to be a business?

Thanks in advance for your advice!
Avonelle


Dear Good-Mom Avonelle,

As accountant and mother of four my first advice is that from now on your son should be asking the tax and business questions himself. That's an important part of his education as an indie.

I would direct him to read certain of my posts on business expenses there's about 80 of them on this blog. After a little research he would come up with the statement: Of course, I must read all kinds of comics to determine which are right for review and which are not. So, of course every comic I buy is a business deduction.

I would also have him look at his library. There may be a very large business expense deduction sitting on his book shelves. He should read this post Converting from Personal Use to Business Use .

Many of my clients and many in my family are writers. It is not an easy money-making endeavor. Your son should start now to learn about every deduction available.

Best,
June