European Stars And Stripes (Newspaper) - July 29, 1988, Darmstadt, Hesse                                Agazine writing is work. It is also business. The Home author needs to know his rights and How to keep books. The Abc s of the writing business by Carole Gould new York times a re you scribbling furiously on the great american novel after work or on weekends Are you supplementing your regular income with freelance Magazine articles or theater reviews for the local paper do you have a script in the works for Miami vice or a joke in the mail for Johnny Carson Many people starting second careers As writers often forget that writing is a business. Agents May have to be hired. Contracts need to be negotiated. And tax Laws must be understood. New provisions have radically changed the Way expenses can be deducted for instance. The following is an introduction to the business of writing. Taxes. Writers who hold full time positions in other Fields can use the tax Laws to subsidize their efforts by showing that their writing is in fact a profit seeking business and not a Hobby Hobby expenses Are deductible Only to the extent of Hobby income. Business expenses can exceed business income producing losses to offset other income. The surest Way to establish a business status is to show a profit in three out of five years. Sometimes it is possible to manage finances by accelerating income or deferring expenses to show profits in three years and larger losses in the other two. Writers just starting out can build their cases by running the venture in a business like manner. Record in a business diary the projects and the time spent writing. Save copies of proposals rejection letters and other correspondence and do not commingle personal and business funds said Laura k. Shanley a tax partner in new York with the accounting firm of Arthur Young. To match expenses More closely to revenues the tax Reform act of 1986 contained provisions forcing Many writers and other artists to amortize expenses Over several years rather than deducting them immediately. The delayed deductions and added bookkeeping artists must track which expenses relate to which project Are a hardship Shanley said. Partial Relief came in May when responding to criticism the internal Revenue service issued relaxed guidelines. Now writers May deduct half of their costs in the year they Are incurred and 25 percent in each of the next two years. Subject to these new limits writers can deduct All expenses related to their writing. These include office rent and supplies equipment repairs dues for professional organizations and subscriptions photocopying typing and Telephone costs. Fees for workshops courses and conferences can be deducted Only if these activities Are designed to improve writing skills not to prepare someone to become a writer. An executive May not deduct the Cost of a creative writing course however someone writing a historical novel May deduct the Cost of a history course. A Home office deduction is permitted when part of the House is used regularly and exclusively for writing. The office need not be a separate room a Corner of a room can be set up with a desk and file cabinets. But the deduction is limited to the amount of net business income remaining after All other expenses have been written off it May not be used to create losses to offset other income. Any unused Home office deduction May be taken in a future year however. Business equipment that lasts More than a year like personal computers or typewriters is depreciated Friday july 29, 1988 generally Over five or seven years. But taxpayers have the option of deducting the full Cost of the equipment in the year of Purchase up to $10,000. Any additional Cost would be depreciated. Since no income tax is withheld from sideline earnings freelance writers May have to increase the amount withheld from their regular paychecks or pay estimated taxes. Freelancers Are also responsible for self employment tax paid in lieu of social Security taxes currently equal to 13.02 percent of the first $45,000 of income. Some freelance income can be sheltered from taxes in a Keogh plan however. Each year up to 25 percent of self employment earnings can be set aside in a Keogh plan with annual contributions limited to $30,000. Agents. Do you need an agent the answer generally is no for people who write for magazines since they usually Deal directly with editors. On the other hand anyone who has full length material that he Hopes to place with a Trade publisher is Well advised to seek an agent said Arnold p. Goodman president of the Independent literary agents association in new York. Manuscripts brought in by an agent will be read More quickly he said. More important agents May be familiar with the editors and publishers who Are Likely to be receptive to the material. Once a manuscript is accepted an agent will negotiate the contract. An agent can advise writers when Money should not be the primary consideration. A Large Advance May be less valuable than an offer to promote the Book heavily for example. Such advice does not Corne cheap. Expect to pay commissions of 10 percent although some agents charge 12va or even 15 percent according to a study by the authors Guild in new York City. Select an agent As you would any professional adviser by reputation and referrals. Ask friends who Are writers or teachers of writing workshops. Both the Ilaa and the society of authors representatives in new York will provide lists of members. Lists of agents also Are found in writers handbooks available in most libraries. Legal matters. Because of the complexity of Book contracts it is Wise to have an agent or attorney handle the negotiations said Tad Crawford a new York attorney and former lobbyist for writers groups. Writers usually negotiate their own Magazine contracts. A key provision is the time for payment. Ask for payment on acceptance not publication. Since Many magazines work on Long Lead times payment tied to publication May not be made for a year or More. And push to get a provision for a kill fee in Case the article is rejected. Try to limit the rights you Transfer. The Standard Magazine arrangement is for first North american serial rights which provides for a one time right to publish. After that control of the article reverts to the author. Be wary of work for hire contracts used by some magazines. These give the publisher All rights to the article including the copyright. What about copyrights since 1978, copyright Protection is automatic As soon As a Story or article is written whether it is published or not. The Protection lasts for the author s life plus 50 years. When the work is distributed include a copyright notice consisting of the Symbol c., the word copyright the year of first publication and your name. It May pay to spend $10 to Register a copyright registration generally is required to bring a lawsuit to enforce the copyright. For an application write copyright office Library of Congress Washington 20559. The stars and stripes Page 13