Treat your writing like a business in 2025

I’m Sarina, and I’m a business nerd.

Hi, my name is Sarina, and I’m a business nerd. I was born this way. I can’t help it. I realize that not everyone gets excited about spreadsheets, but if you have any writerly income at all, I’m begging you to make 2025 the year you treat your writing as a business. There are actually two reasons to do this:

* First of all it’s centering. Treating your writing as a grownup activity helps you frame your goal-setting around writing. It holds you accountable to your goals

* Secondly, and more practically, it makes tax time is so much easier, and it might save you money

First, let’s do a little primer on how writerly income affects your taxes. Unlike a job, which sends you a W2 in January, writers are technically self-employed. In fact, the first time someone pays you for a book or an article, you have just become an entrepreneur.

So, congratulations on your promotion from artist to businessperson. Let’s go over what that means for you. I must offer a disclaimer here: I’m not a tax professional and I’m not your tax professional, so please ask an accountant in your state if you have actionable questions.

Most writers treat themselves as sole proprietors for tax purposes. That means you’re doing business as yourself, and you haven’t taken the additional step of forming a separate taxable entity. For the purposes of today’s episode, let’s assume that you’re in this category.

Depending on the dollar amount—and the professionalism of the people who paid you—a 1099 tax form may appear in your mailbox in January of next year. That 1099 will also be reported to the IRS, who will expect you to report it on your taxes. When done correctly, this income shows up on your schedule C.

It’s possible to deposit your writing income in your regular checking account, and many people do. But what if we assume that your writing business will continue to grow in volume and complexity? Then it’s time to consider treating your writing as a business in 2025.

The first way to do that is to open a second checking account. My tiny bank in New Hampshire offers this kind of account for free. Opening it was as easy as going into the branch and explaining that I wanted an account for my sole proprietorship. This is the where you’ll deposit any earnings you make as a writer.

The second useful account is an extra credit card that only gets used for business purposes. If you have any expenses during the writing year, they all belong on this card. Such as:

* Substacks you pay for to help further your writing career. (See what I did there?)

* Websites you join to assist in your work

* Transportation to writing-related conferences and research

* Printed materials you purchase for research

* Stock photography

* Your Canva subscription, etc

Every one of these things is a business expense. Any money you spend in service to your writing career is deductible from the income you made from your writing. When you’re just getting started, the legitimate expenses might well exceed your income. This all gets netted out on Schedule C of your 1040.

If you have this setup, you won’t have to scramble to figure out your business income and deductions at tax time. Your writing bank and credit card statements will tell the whole story.

Furthermore, if you’re self-published, the business bank account provides an added layer of security. In my publishing business, I have had to provide my banking details to countless publishing platforms. I like knowing that my banking information is separated from my family’s money.

This is also true of your social security number. There’s a fix for this, though. To avoid sharing your social security number with publishers and publishing platforms, all you have to do is request an EIN, or employer identification number from the IRS. It’s simple, it takes only minutes, and I’ll put the link in the show notes.

And there you have it. Your homework assignments are ready—you’re opening a couple of accounts and requesting an EIN from the IRS. It’s not the sexiest part of your writer journey, but don’t let that stop you.

Until next week, writers, keep your butt in the chair and your head in the game.

Links!

Your EIN can be attained here: https://sa.www4.irs.gov/modiein/individual/index.jsp

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit amwriting.substack.com/subscribe