These notes about what we talked about in this episode of the podcast. They are not intended to replace listening to the podcast.


  • Why should authors pay attention to the business side of writing? 
  • What are some common mistakes you see authors make?
  • Do authors need a budget?
  • Let’s talk about business entities. When should authors create an LLC?
  • Let’s talk about estate planning. What happens to books when an author dies?
  • Let’s talk about bookkeeping. 

Benefits of an LLC

  • Liability Protection
  • Estate Management

Downsides of an LLC

  • Depending on your state, additional taxes
  • Cost money to setup.
  • Some paperwork to maintain

More Questions:

  • When is it a good time to create a separate bank account?


The IRS Business or Hobby Factors

  1. Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
  2. Whether the time and effort you put into the activity indicate you intend to make it profitable.
  3. Whether you depend on income from the activity for your livelihood.
  4. Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
  5. Whether you change your methods of operation in an attempt to improve profitability.
  6. Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
  7. Whether you were successful in making a profit in similar activities in the past.
  8. Whether the activity makes a profit in some years and how much profit it makes.
  9. Whether you can expect to make a future profit from the appreciation of the assets used in the activity.


Sponsor: Christian Writers Institute

The Course of the Week: Tax & Business Guide for Authors

In the course you will:

  1. Learn whether or not you qualify for tax deductions for your writing-related expenses (not all writers qualify). You will also find out about the 9 factors the IRS uses to determine if someone is a professional author.
  2. Receive an indie business plan template. Learn how to easily create a business plan for your independent publishing business.
  3. Learn about a simple tool that will help you make more money as an author while helping make you become more audit-proof.
  4. Learn how to start making a writing income even before your first book comes out. Making extra money helps you qualify for tax deductions!
  5. Learn whether or not you need to form an LLC. We will also share a cheap and easy way to form an LLC when the time comes.
  6. Learn about 19 different tax deductions authors can take advantage of.
  7. Learn how to reduce your chances of being audited by the IRS.
  8. Learn how to avoid common mistakes that often get authors in trouble with the IRS.
  9. Tax court cases for your CPA.  

Use coupon code “podcast” to save 10% or click the link in the show notes to activate the coupon code automatically

This course is also part of the Tax & Legal Bundle which is on sale for the first two weeks of November 2019.