Tax Deductions for Authors in Australia: A Practical Guide to Reducing Tax and Protecting Your Writing Income

Introduction

For Australian authors, writing is both a creative pursuit and a legitimate means of earning an income.
Understanding tax deductions for authors in Australia allows you to reduce tax while remaining compliant with ATO requirements legally.
This guide explains what authors can claim, how deductions apply across publishing models, and how to avoid common tax mistakes.

Are Authors Considered a Business in Australia?

The Australian Taxation Office (ATO) does not automatically classify authors as hobbyists. If you earn income or are genuinely attempting to earn revenue from your writing, you may be operating a business or professional activity.

Indicators that your writing qualifies as an income-producing activity include:

• Royalties or book sales

• Publishing contracts or advances

• Speaking or workshop fees

• Consistent effort to publish or promote work

• Record-keeping and business planning

Once income is earned, tax deductions may be claimed for expenses directly related to producing that income.

Income Sources That Affect Author Tax Deductions

Authors in Australia earn income in various ways, and deductions depend on how the income is generated.

Common income sources include:

• Traditional publishing royalties

• Self-published book sales

• Advances against royalties

• Licensing and adaptation rights

• Educational or institutional sales

• Speaking engagements and festivals

Understanding author income streams in Australia is essential because only expenses connected to assessable income can be deducted.

The ATO “Ordinary and Necessary” Test for Authors

To be deductible, an expense must meet both criteria:

• Ordinary: Common in the writing profession

• Necessary: Helpful and relevant to earning income

For example:

• Editing services → deductible

• Research books → deductible

• Personal journaling notebooks → not deductible

Expenses must also not be private, domestic, or capital in nature unless depreciation rules apply.

Home Office Tax Deductions for Authors

Many authors work from home, making home office deductions one of the most significant claims available.

Claimable Home Office Expenses

• Electricity and gas

• Internet and phone usage

• Cleaning costs

• Rent or mortgage interest (partial)

• Office furniture depreciation

Methods of Claiming

1. Fixed-rate method – ATO hourly rate for working from home

2. Actual cost method – Percentage based on workspace size and usage

You must keep:

• Utility bills

• Floor area calculations

• Work-from-home diary (minimum four weeks)

Writing Equipment and Technology Expenses

Authors rely heavily on tools and technology to produce manuscripts.

Deductible items include:

• Laptops, tablets, and monitors

• Printers and scanners

• External hard drives and cloud storage

• Writing software and subscriptions

• Dictation tools or transcription software

Depreciation Rules

• Under $300 → immediate deduction

• Over $300 → depreciated over effective life

If used personally as well, only the business-use percentage is deductible.

Editing, Proofreading, and Publishing Costs

Professional publishing-related expenses are deductible when tied to income-producing activity.

Claimable costs include:

• Structural and copy editing

• Proofreading

• Typesetting and formatting

• ISBN purchases

• Printing proof copies

Many expenses involved in the cost to publish a book in Australia may be deductible once your writing moves beyond hobby status.

Research Expenses for Authors

Research is a legitimate and necessary part of many books.

Deductible research expenses include:

• Reference books and journals

• Archive and database access

• Museum and site entry fees

• Interview recording tools

• Travel undertaken primarily for research

Travel must have a clear research purpose, not a personal holiday, to be deductible.

Marketing and Promotion Deductions

Once a book is published or offered for sale, marketing expenses become deductible.

Claimable promotion costs include:

• Author websites and hosting

• Email marketing software

• Social media advertising

• Book launch events

• Media kits and press photography

Expenses connected to self-published book distribution in Australia, including platform and listing fees, are generally deductible.

Vehicle and Travel Expenses for Authors

Authors can claim travel costs related to:

• Publisher or agent meetings

• Book signings and festivals

• Research travel

• Library or archive visits

ATO Methods

• Cents per kilometre method

• Logbook method (12-week minimum)

Only business-related travel is deductible, and records must be kept.

Professional Development and Writing Education

Expenses that maintain or improve existing writing skills are deductible.

Examples include:

• Writing workshops and courses

• Literary festivals and conferences

• Webinars and online training

• Writing coaching or mentoring

• Professional memberships

Courses that qualify you for a new career are generally not deductible.

Agent Fees, Accounting, and Legal Costs

Professional services directly linked to earning income are deductible.

These include:

• Literary agent commissions

• Contract review and negotiation

• Accounting and bookkeeping services

• Tax return preparation

• Copyright and IP advice

Costs related to understanding royalties and publishing contracts are considered legitimate business expenses.

GST Considerations for Authors

You must register for GST if your turnover exceeds $75,000 per year.

Important points:

• Book royalties are usually GST-free

• Speaking fees may attract GST

• Self-published sales may require GST reporting

GST obligations vary depending on income type and structure.

Record-Keeping Obligations

The ATO requires authors to keep records for at least five years.

Essential records include:

• Receipts and invoices

• Bank statements

• Royalty statements

• Contracts and agreements

• Mileage logs and diaries

Good record-keeping protects you in the event of an audit.

Common Tax Mistakes Authors Should Avoid

• Claiming hobby writing expenses

• Claiming personal items in full

• Claiming expenses before the income activity begins

• Poor apportionment of shared costs

• Inadequate documentation

Avoiding these mistakes reduces audit risk and penalties.

FAQs

Q1. Can first time authors claim tax deductions?

A. Only if they are genuinely attempting to earn income, not writing as a hobby.

Q2. Are unpublished manuscript costs deductible?

A. Generally no, unless income-producing activity has commenced.

Q3. Can authors claim internet and phone expenses?

A. Yes, but only the business-use portion.

Q4. Are grants taxable for authors?

A. Most writing grants are assessable income.

Q5. Do authors need an ABN?

A. Yes, if operating as a sole trader earning writing income.

Conclusion

Australian authors are entitled to claim a wide range of tax deductions when their writing generates income.
By understanding allowable expenses, maintaining accurate records, and applying ATO rules correctly, authors can legally reduce tax and strengthen financial sustainability.
Professional advice ensures your creative work is protected and compliant.