Self-Published Authors and Taxes

Tax ManIt turns out that if you’re self-published, you’re considered self-employed. If you’re self-employed, you need to report your income if you accept more than $400 a year for your services (as seen on the form, here).

Some of you may know this already. But let me tell you, back when I was a naive, trusting seventeen-year-old (as opposed to the naive, not-so-trusting twenty-two-year-old I am now), I was completely bummed out that if I became the author I wanted to be, I’d have to pay taxes on my hard-earned royalties. This includes selling your books online, through PayPal, etc.

So for you writers that are either self-published or vanity-published, here are some tax forms you might want to take a look at.

  • Publications and Forms for Self-Employed Individual: These are all the forms that apply to any sort of self-employed writer. Self-employed in this case would imply self- or vanity-published, because you are putting the money into having your work produced.

    That is the key distinction: you are producing your work. Otherwise, you are working with a small press or traditional, large press, who pays all of the production/marketing costs and eke out a small royalty your way.

  • Filing Requirements for Self-Employed Individual: This page lists the different forms you may have to fill out in order to be kosher with the Tax Man.
  • Business Use of Your Home: This page gives you some idea of what is considered a business in the home, and what benefits you can get by claiming your home office as such. Keep in mind, you need to keep separate receipts, as well as make sure that your office is specifically for your writing, etc. If you’re going to have a business office, keep it a business.

For more information, check out Taxes and the Writer, which goes into more detail (and in paragraph form) about allowable deductions, home offices, retirement plans, etc. And read Death, Taxes, and the Writer for an emphasis on the importance of filing your return, even if you only made $401 in income the previous fiscal year.

P.S. For those of you needing a bit of extra help with your writing, I’ve begun re-compiling my general writing notes on my website, along with all the quotes I’ve compiled over the past couple of years. Stay tuned for more goodies!