Wednesday, May 1, 2013

Down To Business (An IWSG Post)

It's the first Wednesday of the month which means it's time once again for Alex J. Cavanaugh's Insecure Writer's Support Group.

This is an opportunity—a safe haven— for writers everywhere to let their insecurities out and receive and/or offer support and guidance in return. Please click on the above link for a complete list of participants...

I'm going to start off today by telling you that I hate having to write this post.

If this blog has proved anything, it's probably that I don't know anything about anything (Well, except maybe Firefly) and, as I continue to fumble my way toward self-publication, it becomes ever clearer.

And it's not a feeling I enjoy. I feel as though I should already know these things and not knowing them is an Epic Fail on my part.

I'm starting to fear that "Epic Fail" is actually my middle name.

But the worst part is that as clueless as I can (sometimes) be about the writing part, it's really nothing compared to how clueless I am about the business side of things. The idea just grips me with terror because it is so unknown, and if the topic comes up I have to fight the urge to crawl underneath my desk and sit there with my hands over my ears singing "Lalalalalalala...I can't hear you!" until the topic goes away.

Because the writing part I am comfortable with. Mostly comfortable with. The business part...well, not so much. Or, you know, not at all.

But that is not going to cut it anymore so I look to you—my much wiser and more experienced indie author acquaintances—to maybe take pity on the uninformed and idiotic. By all means, do the pointing and laughing thing—I think I've certainly earned it—but then maybe consider throwing a poor girl a bone.

Here is a sampling of my potentially stupid questions (in whatever order they happened to pop into my head):

—Did you start an LLC or something like that? Is a vital step or maybe an unnecessary one?

—Did you consult a lawyer or an accountant? Both?

—And what about taxes? Assuming there's any amount of income, how do the taxes work? I've only ever had W-4s. What do you get when you're an indie author?

—Is the money you spend on things such as cover art or copy editing or domain fees or anything book-creation related deductible?

And I know there's probably a million other questions that haven't even occurred to me and really should have, so if there's a self-published author out there who's gone through the business side of this endeavor and maybe has some insight to share and time to spare to answer a million stupid, stupid questions and who might be willing to talk to me, please let me know. Or if you just know of a good resource for me to use so I will leave you alone, let me know that.

I can be reached through the comments below or at mjfifield at gmail (dot) com.

Thank you.

30 comments:

  1. I think there is nothing wrong with where you are in your knowledge, sometimes the best way to learn to swim is jumping in the waters.

    I myself have many questions still, but as far as the taxes I believe at least with Amazon you get a statement on how much you made and you can use that with who ever does your taxes. I would think those things could be used as deductions.

    As far as a lawyer, I think that is up to you, I have not consulted one, but then again I just put my book out this month. Maybe we can learn more together.

    ReplyDelete
  2. I have no clue--it's a bit of a learning curve I haven't taken yet. Part of why I don't want to self-publish. The business side of things makes me want to go hide ;)

    Lynda R Young
    IWSG co-host

    ReplyDelete
  3. It can be frustrating to not have the answers, but I don't think this automatically makes you an Epic Fail. Everything in life is a learning process, after all. Good luck getting the answers you seek!

    ReplyDelete
  4. I'll follow your blog closely as I have the same (and many more) questions...

    ReplyDelete
  5. I wish I could help you but I think our business models are different because you are US and I am Australia. However, I will suggest you get the paperwork side of it set up before you click on publish. There are tax forms to complete for Amazon, and you will need to keep spreadsheets of sales and royalties. Amazon prepare them but everyone advises to double check.

    ReplyDelete
  6. Fortunately there are a lot of self-published authors out there who will know the answers to your questions.

    ReplyDelete
  7. If it makes you feel better, I'm not even at the asking-those-kinds-of-questions phase.

    ReplyDelete
  8. That stuff worries me, too, so I don't really have anything to offer except my company under the table and my own "la la la" to add to yours.

    Have you reconsidered going the traditional route? There's unknowns there, too, of course, but maybe more guidance in terms of the things you're worrying about? What about having your partner or a close friend help you? My husband is a huge support in researching stuff etc.

    ReplyDelete
  9. Since I wrote a whole book on the subject, I'll try to offer you some answers.

    LLC - only if you plan on taking on other authors, otherwise you can get away with being a sole proprietor.

    You don't need a lawyer, but an accountant would be helpful during taxes as you'll be itemizing now. They will know all of the tax laws for being self-employed - which is what you will technically be!

    And yes, those are all deductions! The miles you drive, all expenses, etc. You can deduct those as business expenses now.

    I hope that helps.

    ReplyDelete
  10. L. Diane already answered some of your questions, so I'll just chime in with what I know. First of all, I share those same worries, which is one of the reasons I haven't self published yet. The business side!!!!!

    But...our tax guy offered me some tips. Yes, all expenses related to writing are deductible. I had to earn SOME money as a writer before I wrote some of this stuff off, but I don't know the details on that. An accountant would. Anyway, I'm also able to write off some of my housing expenses because I write at home.

    I hope that helps! Good luck to you :)

    ReplyDelete
  11. Don't feel too bad. I jumped into self publishing head first and without looking. But I also have a tiny (aka just me) craft business that gave me some business knowledge. My best advice when it comes to taxes is keep a track of everything. Anything you spend money on for publishing your books, write it down. Make sure to note about what you spent the money for. Write down how much you make every month too. It will make things easier during tax time if you have neat records.

    I didn't start an LLC or anything either. I just used my social security as my Tax ID Number (TIN) But right now, I'm not making a whole lot on my books so it's just considered extra income on the taxes. I'm sure if I become a best seller and start making lots of money, I'll have to change things up.

    When I first started my craft business, I bought a ton of books on being a small business. The best one, for me, was Sole Proprietorship Small Business Start-Up Kit. It had worksheets and was easy to understand. Check that out and maybe see if it can help get you organized.

    ReplyDelete
  12. Nothing wrong with asking those sort of questions....it's how we learn.

    I'm not even near that stage yet, so I'll be coming to you when I am as I'm sure you'll have it all figured out by then :D

    Best of luck!

    ReplyDelete
  13. Ask Patrick Dilloway. He's an accountant and author of 30 books or something like that.

    ReplyDelete
  14. Hi M.J.! Thanks for visiting me. It's nice to meet you. :D

    I don't know much either, but one thing I do know is that I think you're asking the right questions! I usually say there IS such thing as a stupid question, but I don't think there is one when it comes to an author trying to get into the game. ASK EVERY QUESTION!

    ReplyDelete
  15. Amazon and B&N, both, will send you statements on the e-books you sell. It's a miscellaneous income statement and is kind of like a W-2 in that it gets reported to the IRS in the same way. Physical books are not handled the same way, but, then, you probably won't sell enough of those online to make a difference anyway. If you order physical copies to sell personally, you are supposed to report that income, also, as miscellaneous income or the equivalent.

    The main thing to know is that, unless you have a run away hit on your hands, you're not going to make enough money from it to worry about it too much. At least, not for a while.

    ReplyDelete
  16. I second everybody saying to talk to an accountant. If you know one personally, that would likely be helpful. It looked like Michael had a good suggestion for someone who has book-related experience.

    I'm also very far from dealing with those publishing-related questions. But I would probably ask my mother most of them first, as she's a CPA.

    I wonder if there isn't some sort of network or group working on helping writers with these sorts of things. There must be somewhere. Now I am curious and must go poke about.

    ReplyDelete
    Replies
    1. Found a few interesting things. Still should talk to an accountant.

      http://www.irs.gov/uac/Business-or-Hobby%3F-Answer-Has-Implications-for-Deductions

      Recent Publication on business deductions
      http://www.irs.gov/pub/irs-pdf/p535.pdf

      Explains classifications of businesses - probably look at Sole Proprieter (That's what I'm seeing everybody talking about online in regards to self-pub)
      http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Business-Structures

      There should be some method to file estimated taxes quarterly so you're not hit up with a big payment at the end of the fiscal year. I'm not exactly sure how that works though, so it's something you should ask your accountant about.

      Delete
  17. I actually avoided my writing and taxes this year because I can't afford an accountant and I didn't know to work US with my Canadian taxes so I decided to, well, not until next year when I can hopefully afford an accountant because it's hella confusing with not just one government but two. Plus I have to FIND one so yeah...I just kinda skipped that this year. (coughs and looks away)

    So uhm....good luck!

    ReplyDelete
  18. I have no answers for you, but it looks like some people do. Just because you don't know doesn't mean you're an epic fail. At least you're smart enough to ask the questions and that's a start. Everyone has to learn sometime. :)

    ReplyDelete
  19. There are so many writers that feel the same way you do. *points to self* It would only be an epic fail if you didn't ask these questions. Give yourself some time, the answers you need only come by asking questions and the writing community is full of wonderful people willing to help. (:

    ReplyDelete
  20. At least you know which questions to ask. That's how you start. Ask the questions, and then the answers will come.

    ReplyDelete
  21. All I can say is, don't be so hard on yourself. I mean that very sincerely. So listen to me. DON'T BE SO HARD ON YOURSELF! Enjoy the ride. The answers will come in time, but not if you're so focused on beating yourself over the head because you don't know them. That will only give you a headache!

    ReplyDelete
  22. Don't know much about nothing either, BUT I do believe that there is no such thing as a'stupid question'. All questions are good and a part of the learning process. I also believe that if most of us knew exactly what it took to be a writer and then go on to have our work published (either traditionally or self) we might never have begun the process. Sometimes a little ignorance and learning as you go along is a 'good thing'. Hang in there you can do it, and there are people who will/can help.

    ReplyDelete
  23. I can't help you as I don't make very much and use 1099's counting the income as part of my annual together with my temp jobs.

    I know the feeling of sitting under my desk with my fingers in my ears, though. Hugs, my friend, it will get better.

    ReplyDelete
  24. When it comes to something like the business of books, I'd say there are no stupid questions, just stupid tax laws you have to get a handle on. And as others have said, luckily there are already a slew of writers who have gone through this before and can impart to you their collected wisdom. I'm just not one of them. Instead, I'll be over here, thinking about Firefly.

    ReplyDelete
  25. Hey,

    So as you can see by now, you're going to have many people under that table with you, including me :)

    (I'll bring a flashlight and some cookies :)

    IF I hear of any other posts relating to this, I will be sure to point you to them, I promise.

    PS... Because of all the awesome help and advice you've dispensed to me (and I'm sure many others,) you are about as far from an Epic Fail as I am from the moon, so shhhhshhh with all that talk.

    ReplyDelete
  26. Sadly, I can't help you today, but am really hoping that you'll get the answers you're looking for. :-)

    ReplyDelete
  27. hey! you got some great advice! and so did i! i can deduct my travel expenses when i do a book tour! my hub will be thrilled! but i doubt i'll make enough to change our income much, maybe thats good!

    fingers crossed for your indie success!

    ReplyDelete
  28. Looks like I'm late to the party.

    Don't fret! Look at all the info you got from asking a few simple questions on one simple day!

    We all learn as we go.

    I use an H&R Block guy because we have complicated taxes before the writing thing. He tells me to save every single thing related to my writing for my taxes. He even does some hocus pocus thing about me working out of the house and my laptop and my utilities. There are deductions out there. I don't think you need to hire someone full time, just at tax time.

    Good luck. One day at a time.

    No Epic Fail.

    Only Epic!

    Heather

    ReplyDelete
  29. I can totally understand your fears. I'm also considering self publishing and I've been doing a lot of research. Some books which you might find helpful include: APE: Author Publisher Entrepreneur by Guy Kawasaki, Dan Poynter's guide to self publishing vol. 2 and The Complete Guide to Self Publishing by Marilyn Ross.
    Nutschell
    www.thewritingnut.com

    ReplyDelete