Author deductions

The first year of any business is when investing in professional advice makes the most sense. The "exorbitant amount" due to the business portion of your tax return will be a deductible business expense in the year paid.

It's not clear what your relationship to the publisher is. Unless you are self-publishing, why would you have to buy copies of your own book? If you are self-publishing, then whatever copies you hold for sale are inventory, and copies you send to reviewers, I would consider advertising expense.

As for your other expenses, whatever is ordinary and necessary for your business is deductible. Special rules apply for depreciating listed property such as cell phone, vehicle, and computers.

-Mark Bole

The incremental cost due to business use is deductible. Possibly, a proportional amount of the cost (based on business vs. personal use) is deductible.

Buying books for the purpose of selling them (at a profit, presumably) makes them inventory. If you plan to display them to get people to buy them at bookstores, that's promotional.

That would be promotional.

Promotional expenses are deductible.

Make sure the IRS will consider this a business, not a hobby. (Did you get a cash advance from the publisher? That pretty much guarantees it's a business.)

Seth

And ask said professional if you can put treat the income you'll receive each year (when it starts coming in . . .) as self-employment income and put roughly 20% of that income (before taxes) into a single-person tax-deferred Keogh plan, over and above any other tax-deferred or before-tax retirement savings contributions you may be making.

(If you want to do that, of course.)