If I was fired this year, am collecting unemployment but writing in hopes of selling my work when completed, can I claim the home office deduction and expenses?

If you are new to being self employed, are not incorporated or in a partnership  and  are acting as your own bookkeeper and tax preparer you need to get educated ....  

If you have net self employment income of $400 or more you have to file a schedule C in your personal 1040 return for self employment business income. You may get a 1099-Misc for some of your income but you need to report all your income.  So you need to keep your own good records. Here is some reading material……

IRS information on Self Employment….
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center 

Publication 334, Tax Guide for Small Business
http://www.irs.gov/pub/irs-pdf/p334.pdf 

Publication 535 Business Expenses
http://www.irs.gov/pub/irs-pdf/p535.pdf 

Publication 463 Travel, Gift, and Car Expenses

Https://www.irs.gov/pub/irs-pdf/p463.pdf  

Home Office Expenses … Business Use of the Home

https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction

https://www.irs.gov/pub/irs-pdf/p587.pdf

Publication 946 … Depreciation

https://www.irs.gov/pub/irs-pdf/p946.pdf

                                              

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Self Employed return and will help you keep up in your bookkeeping all year along with calculating the estimated payments needed ....
http://quickbooks.intuit.com/self-employed

Self Employment tax (Scheduled SE) is generated if a person has $400 or more of net profit from self-employment on Schedule C.  You pay 15.3% for 2017 SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.
 


PAYING ESTIMATES
For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% for 2017  SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.

You must make quarterly estimated tax payments for the current tax year (or next year) if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits. 
 
- 2. You expect your withholding and credits to be less than the smaller of: 
    90% of the tax to be shown on your current year’s tax return, or 
  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

To prepare estimates for next year, You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

OR Go to….
Federal Taxes or Personal (H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

Thanks for the info. It’ll definitely help going forward. However, for this tax year I have full income from my previous job and unemployment through the end of the year.  I am writing several novels but have not taken them to publishing this year, so there will be no income from writing this year so I had specific questions about my specific situation. If anyone can answer those questions it would be appreciated. Thanks

Short direct answer ... until you have a business with income you really don't have a place to deduct expenses.  Until then is it considered a hobby with no income. 

https://www.irs.gov/newsroom/hobby-or-business-irs-offers-tips-to-decide

Thanks. Do these rules apply the same if the new business ie writing would be considered a start up and these are start up costs? I read that the IRS will determine if a new business should have had start up costs deducted based on whether or not that business has made a profit over a three year period. I was trying to determine the best course of action for this years return with consideration to the fact that I have decided on the career switch after being terminated this year and have spent a good amount of money on the equipment being used expressly for this new venture. I would prefer to claim the purchases in the year acquired or 1st used as opposed to waiting for 3 years to see if I have made a profit and then not being able to claim the equipment or not being able to receive the full tax benefit that I may have been entitled to if I had claimed it in the year of acquisition. If this was not a creative field and there was more of a clear delineation between what is a writer and a business as opposed to a more straightforward business model, it would be easier to determine hence the need to reach out on this site.