Most new writers will be “cash basis” taxpayers by default. The cash basis of accounting is your way of reporting your business income and expenses on Schedule C attached to your annual Form 1040.
On the cash basis you recognize or report your income for tax purposes when you actually receive it and you are allowed to deduct your expenses only when you have actually paid them.
One exception: If you put some of your business expenses on a credit card (VISA, etc.), those items may be deducted in full in the current year even if a balance due remains on your account for them in the following year. If you are showing a tidy profit around the end of November and you are low on cash, you may wish to stock up on supplies, books, hardware or software before year-end to lower your tax bill by using your credit card in December.