The IRS expects new businesses to have start-up costs (buying a computer, office supplies, renting an office, buying a car or truck for business use, buying insurance, etc.). These are all legitimate and necessary expenses, depending on the type of business you will have. For a travel writer, it becomes necessary to travel to various places and to see and experience the things you will be writing about. So, how can you deduct those expenses and prove to the IRS that your reason for traveling was to earn an income from it?
The absolute best way to accumulate strong evidence that you are serious about travel writing (and that you are a professional) is to get magazine editors to give the go-ahead on a query letter you’ve sent them. Their response to a query letter is proof-positive that magazine X wants to see your writing and will pay you if it is accepted. This is why I have made such a big deal out of writing a good query letter. The query letter is your proof that you are actively trying to sell your work.
Here’s another very important piece of information that I was thrilled to learn:
Even the query letters that are rejected by the magazine editor are very useful. Keeping every response from every query letter you send is important. The rejection letters also show that you were trying to sell your work to a magazine, but they declined. You then sent another query letter to the next magazine on your list. Maybe they declined the query also. You might have three or four rejection letters before an editor says “yes”. With that one “go-ahead” letter, you can take the trip, write the article and deduct the reasonable travel expenses that you will incur.
Does that mean you can’t take the trip and deduct the expenses if none of the editors say “yes”?
This is the beautiful part. If you don’t get a “yes” response from any of the editors you’ve sent a query to, you can still go on the trip as planned, gather the information, take the pictures, and return home with the makings of a great travel article (you should actually have enough material for many articles). As a new business, you can still deduct the expenses, even though you don’t have any income from the trip yet. You must now start sending query letters to magazines about the trip you just took. You will be trying to sell articles based on what you have already seen and heard. You should be able to write a strong query letter because you can now match the potential article to what the magazine readers are most likely going to want to read about. So this is a plus for you! You can still sell your work and earn a check to offset the expenses. You will have a small stack of letters from editors to prove that you tried to interest them in your trip and your writing. If and when the IRS wants to talk to you about your business, you can pull them out and prove that you are a professional and you’ve been trying to sell your work. You’ve properly documented your activities so there is no doubt that you are not just pursuing a hobby (the IRS does not allow these deductions for hobby purposes). You are a serious writer doing things in a professional manner! Just don’t forget that you only have about a year to try to earn an income. You can’t have all expenses/deductions without showing some income! Red flag, penalty, audit for sure! So sell some work and keep records and prosper. I believe the general rule is that you will have to show a profit for three of the first five years or the IRS will want to have a chat about what you’re doing.
So that’s the process in a nutshell. Keep good records and you will never have a problem proving your intent to share your prose with the world (for a fee, of course!).
I highly recommend Gordon Burgett’s wonderful book, The Travel Writer’s Guide for anyone wanting to learn from a pro. Gordon has been both an editor for magazines and a freelance travel writer. He’s had his writing published in magazines and newspapers over 1,700 times. I’ve taken his 4-hour travel writing course and loved it. You can benefit from reading the Travel Writer’s Guide.
How to Get Your Book Published Free in Minutes and Marketed Worldwide in Days
Test Your Niche Book First!
Travel Writer’s Guide (Trade Paperback Book)
How to Set Up and Market Your Own Seminar (audio series)
Here’s a little disclaimer: You should do your homework and consult with a CPA before starting out. Make sure that you know what the rules are (exactly what is deductible) before you go on any trips, not after. In this case, it’s not easier to say you are sorry later. The IRS won’t want to hear that. Be knowledgeable about your business and you can stay out of trouble, prosper and travel happily ever after.