Friday, April 9, 2010
Talk with an indie-savvy tax pro. Use the loss.
To file or not to file. H&R Block tells me I had no taxable income for 2009, and that I don't have to file. My VA check is not taxable.
I spent last year researching a novel and working on a manuscript. This year will be different. I am working with an editor and a publisher. I have never been in this position.
Don't I have to send the IRS some kind of form?
You may not be required to file a tax return but it is to your tax advantage to file a tax return.
I assume that as a writer you had expenses, such as: research; office; travel; phone; ISP; etc. With no income those expenses result in a business loss.
I will not get into heavy tax jargon but know that there is something called a "net operating loss." The regs on that have recently been expanded. What it means is that if you have a loss, that loss may be deducted from income in a previous year or in a future year. Yes! That loss can get you back some tax money on previously-filed tax returns. Or tax returns not yet filed.
File an extension. Here's a link with info -- #23 Be Smart: File An Extension. And then get yourself an indie-savvy tax pro.