A large number of writers and artists overpay their taxes. Over the years I have seen these clients pay as much as double the amount they should have. As a writer myself, I am dismayed when a new client comes in that has overpaid for years. Writers work hard to turn a dollar and overpaying taxes can devastate a career.
For writers making $5,000 to $30,000 in profit a year, the easiest way to to reduce the tax burden is with a triple-net lease back of your home office. The simplest way to facilitate this tax advantage is to form an LLC as a single member. Then you rent your office from yourself, turning earned income into unearned income and avoiding the 15% self-employment tax.
This works for all small businesses that work out of the home. This low hanging fruit can return over $4,000 per year in tax savings, depending on your personal tax situation.
If you have any questions on setting this up, contact me. My website is: http://www.taxprepusa.net/.
Tomorrow I will discuss another tax saving strategy for writers with a larger income.
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