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Friday, January 14, 2011

New Tax Laws in 2011 for Writers

Guest Blogger
Carol Topp, CPA

Congress passed several new tax bills in 2010. Are there any tax breakers for writers? CPA and author, Carol Topp says, yes, there are some tax breaks that writers, authors and publishers need to know about including:

* a 2% raise for all workers including self-employed freelance writers
* increases on common business deductions that authors and writers should know about
* a first-time deduction to the self-employment tax
* changes in deductions for health insurance
* incentives to hire employees and buy equipment

Carol will discuss all these important tax changes for writers, but she will also discuss some laws that will affect you in the near future such as the the 1099MISC reporting requirement.

1099MISC reporting requirement.

As part of the Patient Protection and Affordable Care Act (PPACA or fondly called “Obamacare”) a 1099MISC reporting requirement was added. All business owners know that they have had to give independent contractors who provided services (such as web designers, freelance writers, editors, etc) a Form 1099MISC if they were paid more than $600 in a year. No 1099MISC forms needed to be sent to corporations or for the purchase of goods.

But this act changed that reporting requirement effective January 1, 2012. Now a small business owner must give a Form 1099MISC (and a copy to the IRS) to all vendors supplying goods or services including corporations paid more than $600 in a year.

This means for every vendor you pay more than $600 in a year you must collect their legal name and tax ID number (using a Form W-9) and send them a Form 1099MISC at the start of 2012. This includes hotels, airlines, office supply stores, computer stores, etc. This law becomes effective January 1, 2012, so you need to start collecting data during 2012 and give the 1099MISC forms in early 2013.

Imagine what this means to you, a self-employed writer. You walk into Office Depot and buy paper, ink and a new printer totaling $400. No problem you think, I'm under the $600 1099MISC limit. Later in the year you buy more supplies for $250. Now you've given Office Depot more than $600 in a year. You need to collect their legal name and tax ID number. Do you think the cashier has that information? Probably not! Your record keeping must track how much you pay each and every company so that you can send them 1099MISC forms by January 30 of 2013. If you already hate record keeping, this is going to add to that burden.

This is an unnecessary and unreasonable record keeping task for small business owners! Email your congressional representative to ask for a repeal. (Google “repel 1099 MISC reporting” to find several sample letters). Many congress men and women has vowed to overturn this potion of the PPACA. Let's hope it's sooner rather than later!

Listen as Felice Gerwitz interviews Carol Topp about these important issues facing writers.

Monday, January 17, 2011 at 3:30 pm EST.

Join us LIVE here

Carol has created a handout summarizing these tax changes for writers. Go to to get your copy of the handout. Take it to your tax preparer and make sure you are getting every deduction you are allowed!

Bio: Carol Topp has been married to her husband, Dave, for 26 years and they have two daughters. She lives with her family in Cincinnati, Ohio where they enjoy reading, traveling, art museums, hiking, their church and homeschooling. Carol's daughters, one in college and one in high school, were homeschooled through high school graduation.

Through homeschooling, Carol discovered her love for teaching and communicating through writing and speaking. She has written several books sharing her experience and accounting knowledge, including the Micro Business for Teens series, Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out,  and, as a contributing author, Home Work: Juggling Home, Work and School Without Losing Your Balance. She has also published several magazine articles in The Old Schoolhouse, Home Education, Homeschool Enrichment, Nonprofit World magazines and the National Association of Tax Professionals TaxPro.

Carol is a Certified Public Accountant (CPA) as well as an author and specializes in tax preparation, small/micro business accounting, and nonprofit accounting. She has presented numerous workshops on money management, business start up, taxes, budgeting and homeschooling to various writers groups, community, church and homeschool organizations. Carol was born and raised in Wisconsin and graduated from Purdue University with a BS in Engineering. She worked for the US Navy as a cost analyst before obtaining her CPA license in 2000. She published her first book in 2008. Her websites include

Carol Topp, CPA Author and accountant For homeschool organizations and leaders

Does your teenager owe taxes?

Know a teenager who wants to start a business?


  1. Thank you Carol for this very timely article and all the research you shared with us!

  2. That was a very helpful and informative show. Thank you!

  3. can anyone tell me which book to refer for Tax law practical problems...

    1. Dear tax debts,
      The Information in a Nutshell book Business Tips and Taxes for Writers is a very practical resource on income and sales tax for writers, freelancers, bloggers, etc.
      It covers US taxes. I' see from your website address you are in Australia. The chapters on record keeping and software would still be helpful to any writer.

      Read a sample chapter at

      Carol Topp, CPA
      Author of Business Tips and Taxes for Writers