erinfinnegan: Itemizing Manga?

Irresponsible Manga Reviewer (

erinfinnegan) wrote,
@ 2008-05-20 18:14:00

Entry tags:

manga, taxes

Itemizing Manga?
I decided that I'm going to itemize next year's taxes, taking into account expenses related to my freelance writing.

Can I write off manga purchases as research, since I write about manga?!

(Post a new comment)

	exedore 2008-05-20 10:21 pm UTC (link)
	In a word: Yes. In a few more words: If I can write off all my theatre tickets (which I can), you can certainly write off your manga. You can also write off your day planner, pens/pencils, and other office-y supplies include software upgrades required to do your job. (Reply to this)

dorkart
2008-05-21 01:02 am UTC (link)

I think you can definitely write off the manga you write about. For all other manga, you probably have to make a case that reading all of the manga you've bought helps you be a better manga reviewer. Sure, you don't write about fishing manga, but knowing that it exists and being familiar with it helps you understand other kinds of manga? Who knows?

You could also itemize things like going to conferences/conventions for writing manga, etc.

I think the limitations are mostly about whether you make your livelihood writing about manga. Do you get paid for it? If yes, do you pay taxes on that income? That's the trade-off.

You can write it off, but you gotta pay taxes on what you get paid to do it.

(Reply to this)(Thread)

erinfinnegan
2008-05-21 03:07 pm UTC (link)

I get sent a lot of manga for reviews for free - but I also buy some of the manga I review. Reading a lot of manga, and subscribing to manga magazines, keeps me abreast of the industry as a whole and helps me contextualize the review copies I receive.

I think the limitations are mostly about whether you make your livelihood writing about manga. Do you get paid for it? If yes, do you pay taxes on that income?

This year I will get paid a chunk of change for freelance writing on a regular basis, so I will pay taxes on that amount!

(Reply to this)(Parent)

oneangryrabbit
2008-05-21 01:43 am UTC (link)

Do you have Quicken on your Mac? It's really good if you want to itemize since the expense categories are set up to correspond with tax forms, so you can get a better idea of what counts toward business expenses. After I learned Quickbooks for work, I started using Quicken since I actually have expenses to track now and it's ten times better than any freeware out there. I tried a couple before I found Quicken inexplicably sitting in a folder for something else.

You can legitimately itemize manga, anime and cons since they all contribute to your understanding of the genre - you can even write off American comics because you probably compare manga and comics sometimes. Research is a very broad category and being able to write off a significant chunk of my entertainment is super awesome.

It is important to note that you can only itemize against declared income, and your expenses should not exceed the related income.

(Reply to this)(Thread)

	erinfinnegan 2008-05-21 03:23 pm UTC (link)
	I have to confess that I'm allergic to Quicken, but I will use it based on your ringing endorsement. >It is important to note that you can only itemize against declared income, and your expenses should not exceed the related income. So if I make, say, $1000 writing this year but spend $1200 flying to cons and buying manga, is it a moot point? (Reply to this)(Parent)(Thread)

oneangryrabbit
2008-05-21 04:46 pm UTC (link)

I'm going to be explaining Quicken to Scott so I can just show both of you together if you like. Just have your bank & credit card statements ready (you may also be able to import files from your bank), and start saving receipts if you don't already do so.

>>It is important to note that you can only itemize against declared income, and your expenses should not exceed the related income.

>So if I make, say, $1000 writing this year but spend $1200 flying to cons and buying manga, is it a moot point?

I'd say that you just don't declare all your expenses, but my uncle the accountant loaned me a phonebookesque tax reference and told me to look at the schedule C section and I'm going to shut up until I actually know what I'm talking about. If I feel energetic, I'll lug the reference along to the Quicken lesson and we can all try to decipher it.

(Reply to this)(Parent)

goawayplease
2008-05-21 02:36 am UTC (link)

If you make money off a given thing, you can itemise those things as expenses on a schedule C. You can only take a loss on a specific type of business expense for three years running. Then it stops being a failing business and becomes a hobby.

Incidentally, if you have odd, specific questions, you can call the IRS. I know it's intimidating, but they're really helpful and friendly and they're willing to help out people who are doing their taxes themselves. It's not like calling the city with a complaint; the IRS tax helpline is probably the most well-educated one out there, you'll be getting your advice from the horse's mouth and it's free... They were instrumental in correcting my big bad tax problem of 2005 [I paid them extra money and they gave it back to me quickly] and even the Arkansas state tax line was helpful and fast earlier in the year -- they answered my email and gave me a phone number that went right to that person's desk! Sometimes you'll be on hold for a while with some of the state tax or business centers, but it beats calling TimeWarner or your bank. If you end up with questions you can't talk to us about, call them before you go to an accountant. They're nice people with masters degrees living in the Midwest. I wouldn't hang out with them after work, but they'll walk you through any trouble you're having.

(Reply to this)(Thread)

erinfinnegan
2008-05-21 03:27 pm UTC (link)

N. once had a big Roth IRA tax-related problem in 2003 or so, and called the IRS. He was finally transferred to someone who he could hear flipping through a book. After looking all over the internet for the answer to his question he was alarmed to hear someone looking through an analog tax code book on the other end of the phone.

Also, they didn't answer his question. It's still up in the air, and we'll see if he gets audited in the next couple of years.

So my impression of the tax help line wasn't good - but then, my problems aren't that complex, and things may have changed.

(Reply to this)(Parent)

	crypticpress 2008-05-21 04:32 am UTC (link)
	I second the Schedule C recommendation. (Reply to this)(Thread)

	wearylemur 2008-05-21 01:14 pm UTC (link)
	The clarify you don't have to make money to itemize. You only have to show an intent to make a profit. Many people itemize based on the idea that they are trying to make a living off of their hobbies. (Reply to this)(Parent)(Thread)

	erinfinnegan 2008-05-21 03:28 pm UTC (link)
	Is it like the suggestion above, though, where if I claim a loss more than three years in a row it's no longer a failing business but it's just a hobby? (Reply to this)(Parent)

ogreteeth
2008-05-21 02:17 pm UTC (link)

The one caveat is that you should compare your itemized list to the standard deduction and take the larger one. There's no point in going through the hassle of filing an itemized list if you are not benefitting from it.

Also, if you purchase Quicken, that can count as a business expense (read: expense deductible) as well.

I've been doing the small business thing for several years now and have run into a lot of random, weird things. I'm happy to help answer any questions if I can.

(Reply to this)(Thread)

	erinfinnegan 2008-05-21 03:36 pm UTC (link)
	Wait a second, what's your small business? (Reply to this)(Parent)(Thread)

	ogreteeth 2008-05-21 04:36 pm UTC (link)
	I've been doing computer consulting for a while now. Whether or not I turn a profit varies a little bit, but margins don't have to be high to be positive. (Reply to this)(Parent)

(Anonymous)
2008-05-21 02:36 pm UTC (link)

Generally, it is probably not a good idea to try to take questionable deductions, unless you bought those manga for the sole purpose of writing reviews for them. If there is a shared use (for both business and pleasure), it can be hard to justify during an audit. As others have mentioned, I would consult with an accountant and read the material the IRS has made available on this topic (http://www.irs.gov/newsroom/article/0,,id=172833,00.html IRS Publication 535).

(Reply to this)(Thread)

	erinfinnegan 2008-05-21 03:35 pm UTC (link)
	Thanks for the link! It seems to boil down to whether or not I expect to turn a profit from freelance writing. I do expect to profit and I depend on the extra income, but that income is rapidly spent traveling to conventions. If, for example, I make $150 writing about San Diego Comic Con, that does not offset the cost of the $250+ plane ticket to fly there. (Reply to this)(Parent)(Thread)

	ogreteeth 2008-05-21 04:38 pm UTC (link)
	One other thing to note from that article that's linked is that you're expected to profit 3 out of 5 years. Taking on more work, or not deducting expenses will help keep those numbers under control. (Reply to this)(Parent)

ggymeta.wordpress.com
2008-05-22 02:43 pm UTC (link)

Came over here from Mangablog, where it says and I quote: Erin Finnegan wonders if, as a professional manga writer, she can write off her manga purchases,

At first I thought...wow, I haven't read any of Erin's manga, and then I came to say that - NO. My accountant tried to write off some books I'd acquired for research purposes for the GNs I wrote, and books like that aren't considered a 'business expense', for a writer of fiction. LOL!

As a freelancer though, I don't see why you shouldn't be able to--the only gray area being, are you writing about the manga your purchase. I suppose you fill out a 1099 right? Well, if you can attach manga purchase receipts to the 'check number/online invoice' number of the review or story you were paid to write, it should be considered a legit write off.

(Reply to this)(Thread)

	erinfinnegan 2008-05-22 04:22 pm UTC (link)
	Hmmm, maybe I should ask Brigid to clarify so I am not accused of writing manga. The trouble here is that the manga I get paid to write about I receive for free. I sometimes write for free about manga I purchased. The compensation I get (for that) is a discount at a comic book store. (Reply to this)(Parent)(Thread)

	ggymeta.wordpress.com 2008-05-22 05:55 pm UTC (link)
	Nah, don't do that on my account...I think it gives you an allure of mystery. You'll have hundreds Googling and looking for you name on Amazon! LOL! Hmm I would write off what I could - just use the discounted receipts from the comic shop. ^_^ I can't imagine anyone getting too worried about it at the IRS, unless it's over a $1000 in deductions. ^_^ (Reply to this)(Parent)

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