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What Authors Need to Know About the New Tax Bills

3 December 2017

From The Authors Guild:

It’s a fast-moving target, but our lawyers and staff in New York and Washington are analyzing the proposed tax bills to see how they will affect authors. As we await a final Senate bill, given the amount of confusion, we wanted to let you know where things stand right now.

The principal changes to individuals’ income taxes proposed by both the House and Senate bills are 1) changes in tax rates, 2) the elimination of many specific, itemizable deductions and credits, and 3) the increase in the standard deduction. These changes are intended to streamline personal income taxes by limiting the number of those filing itemized deductions. It will make filing returns simpler for many taxpayers, and will benefit those who rely on the standard deduction. However, it will penalize those who currently have high deductible expenses, such as medical costs, dependent child care, and high local and state income and property taxes.

The types of itemized deductions and credits to be repealed differ somewhat under the Senate and House bills, and those differences are described below. Neither bill, however, would repeal self-employed writers’ ability to take standard business deductions—a source of some confusion since certain individuals who file as employees, such as “qualified performing artists,” would no longer qualify for unreimbursed business expense deductions under the proposed bills.  This provision is applicable only to employees, and not freelancers.

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Some authors use an LLC or other pass-through corporations to contract with and be paid by publishers and others. There are also proposed changes that would affect pass-through corporations, which are still the subject of some debate. We will provide further updates on those as the bills progress.

Link to the rest at The Authors Guild and thanks to Christina for the tip.

The Business of Writing

9 Comments to “What Authors Need to Know About the New Tax Bills”

  1. The Tax bill seems to cause some degree of consternation, depending what side of the political spectrum you are. In the end what matters is how much is not taken in taxes and goes in my pocket. I live in California, the highest taxed state, but I don’t mind losing that deduction. Simply put all states with high taxes and big deficits (California, New York, etc.) are also socialist inclined. Why should the citizens of other states pay for California socialists experiments?
    I just finished reading the one of the best books books I ever read, “Wealth, Poverty and Politics” by Thomas Sowell. If you are confused about what goes on today politically and economically, read this book, and you’ll see how naked the king is. Or the demagoguery of the politicians to keep us all equally poor and voting them back in the office.

    • +1 I learned about Thomas Sowell from one of my Economics professors at Howard University. I am still learning from Mr. Sowell where he is now at the Hoover Institution.

    • I’ll look up that title. I live in NorCal and like you, pay excruciating tax rates with little to show for it. We pay some of the highest taxes in the country but we have the worst roads. Our schools score below many 3rd world countries. The state mandates proactive ideas like forcing gas manufacturers to use MTBE to “save the environment”, driving up the cost of fuel. It eventually destroyed cars’ fuel lines, leaked into all the state’s groundwater, and poisoned thousands of wells, not to mention costing taxpayers tens of millions of dollars. The same idiots who mandated this ecological nightmare proceed to outlaw it twenty years later.

      There is nothing worse than a politician trying to look busy.

    • Agree 100%. Sowell is truly wise. SoCal resident here. I cannot wait to be free of family obligations so that I can depart what has become a nightmare of incessant socialism.

    • Sounds promising.
      I’ll be going with a used copy, though: Hardcover: $22.80
      Kindle: $23.99
      Used: $11.54

    • Bingo. ‘Equality for all’ is just a friendly way to state that govt wants us all equally miserable and dependent upon our elected officials. That’s their business model, Repubs and Dems alike, mostly. Big Tobacco wants you addicted to tobacco, Big Oil wants you addicted to oil, Big Gov’t wants you addicted to Big Gov’t. Somehow, half the population only sees the first 2 examples.

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