I've been thinking about taxes, still, even a month after the issue of taxes is sort of out of our collective minds. Since I have yet to publish any sort of fiction in any way, I was wondering how authors who self-publish have to declare their taxes.
From what I understand, but I'm really not sure, self-published authors are considered self-employed. This is what I can make of things from a little research I've done on the topic. Those of you with experience can tell me, so please do! When you self-publish, you really are expected to figure out and pay your own taxes, right?
It also make me wonder what traditionally published authors have to do with their royalty earnings. Are traditional authors self-employed, too? I'm thinking they're not, but that would be really cool to know, as well.
I'm not quite sure how taxes work over there in the US but in Australia any money we make on the side has to be declared and we're all considered self employed if we earn income regardless of the source. I've been trying to avoid thinking about the other hurdles I'll need to go through to deal with intercountry taxation!
ReplyDelete@Lan: Yeah, I don't envy you, Lan! Having to deal with inter-country taxes is going to be messy.
DeleteHi,
ReplyDeleteI haven't published a book yet, neither traditionally or self-published, but I do know that once I began to earn income, I have to pay taxes. I am an American ExPat and I am living in Europe as a writer and singer and I am considered self-employed. My income is reported to the governmental tax organisation.
Hope this helps.
Shalom,
Patricia
@Pat: I am sorry to hear that you still have to pay U.S. taxes even though you live and work in Europe. That really is messed up.
DeleteI'm Canadian living in Canada and I pay U.S. taxes.
DeleteIf you self-publish through Amazon but are not a US citizen you have to fill out some paperwork with the IRS to prove you are not American, otherwise they withhold 30% of your earnings just in case. Once the forms clear Amazon will stop withholding (and you can file next year to get them back), but I think I made a mistake on mine because it's been months and I still haven't gotten it sorted out.
Sorry, that doesn't have anything to do with your specific question, but it is a topic near and dear to my heart.
cdgallantking.ca
Traditional or self-published, you have to file/pay taxes on what you earn and are considered self-employed. You receive 1099s-MISC forms from retailers/publisher as the publisher/retailers report what you earned to the government. As a self-employed person, there are business expenses you can deduct, though. If you make profit, then you'll likely have to pay taxes on what you earned. But yes, you do have to file and claim what you make and all of that. I'm not sure how it works if you make a bunch in different countries, though. I haven't made enough to find out yet. When I do, I'll probably hire someone to do my taxes.
ReplyDelete@Cherie: Yeah, I do know how taxes work for those who are considered self-employed. I was not sure whether people who self-publish are considered self-employed, but I figured they were. Things get complicated when you make a lot of profit when self-employed, so while that's GOOD, it's also bad when it comes to taxes. The U.S. needs a major tax-code revision badly!
DeleteEven traditionally published people are considered self-employed. I wish the US would revise the tax code. It's way more complicated than it needs to be. Of course, it'd take a miracle and a half to get anyone in Congress to agree with each other long enough to revise the code. *rolls eyes*
Delete@Cherie: Ironically, Congress does agree with each other on the tax issue. They just agree with each other that it should stay as it is, or get even worse. *joins the eye-rolling*
DeleteI'm grappling with the same questions, except I'm in South Africa so we'll be of no help to each other. ;-)
ReplyDelete@Misha: I hope you can figure out Amazon and foreign taxes!
DeleteMy wife is self employed and filling out the taxes isn't too difficult. Basically you put in how much you made and subtract your expenses, unless you have some sort of weird partnership or something. I'm pretty sure writers, self-employed or not, fill it out exactly the same way. The only difference between trad-pubbed and self-pubbed is that trad-pubbed offers will get heir numbers sent to them via the 1099 form from the publisher. Self pubbed authors will have to add up the numbers on their own.
ReplyDelete@Ken: Ah, yeah. You're probably right. Thanks for the info about your wife!
DeleteWhatever you make, however you make it, the US gov't wants to get it mits on as much as possible. I think publishers take tax forms from authors and report to the gov't, and they send you royalty statements, but you're in charge of figuring out the total and paying the gov't.
ReplyDelete@Lexa: Yeah, you're right about that. Thanks for the info on traditional authors!
Delete