Making the move from hobby to business requires treating your writing like a business.
Disclaimer: I am not an accountant or business advisor. I’m simply sharing a few things I’ve learned over the past decade. Always consult industry professionals before making business decisions.
How to make Writing a Business
Write and market on a consistent schedule to keep readers interested. This is important to your success as a writer, and to being able to claim your writing as a business for tax purposes. U.S. Fderal tax laws have specific rules for claiming a business vs. a hobby. Talk to an accountant for more details.
Set up a doable schedule and plan releases, marketing events, newsletter schedules, and blog schedules according to the time, energy, and ability you have at this point in your life. Plan as far ahead as possible so you’re not always scrambling last minute to find content or submit deals or newsletter spots.
Ask other writers or writing professionals about things you are unfamiliar with or don’t understand in order to avoid mistakes that could hurt your career or slow you down. Most writers are very willing to help. The indie writing community is wonderfully supportive in most cases. Research as much as possible (The Write Life, ALLi, Jane Friedman, Udemy, etc.), but then ask question about things you aren’t sure about or need help with.
Find a professional familiar with self-employed creative arts businesses or LLCs. Royalties have specific rules that not all accountants are familiar with. If you know local authors or artists, ask for recommendations.
Learn about options for business setup and associated laws/taxes/liability. If your town has a local Small Business Center, set up an appointment and start learning. They have a lot of knowledge and a wide variety of contacts to help you.
The IRS has specific definitions of a business (purpose is to make a profit, it is engaged with continuity and regularity, etc.). You need to meet these requirements in order to claim your writing as a business for tax purposes. Again, consult a professional for advice on this!
If your business is reclassified as a “hobby” you will lose deductions, among other repercussions. Don’t begin claiming writing as a business until you can show at least some profit. You will be required to show a profit on a regular, yearly basis to keep from having your writing being reclassified as a hobby.