MIND YOUR OWN BUSINESS! A HELPFUL POST by VALERIE LAWS
|Why writers don't see themselves as businesses? No bird-feeding or kite-flying.|
Following on from Catherine Czerkawska’s excellent post the other day, asking why creative writing courses don’t prepare would-be writers for the business side of writing and promoting, I’m going to come out now right here in front of you all.
I am a business.
There, I’ve said it. Many of you are already businesses, but perhaps you don’t know it yet. Perhaps you are in denial. You don’t want to photocopy your bum at office parties or wear boring suits or behave like Mr Banks in 'Mary Poppins'. Or as a writer, you work mostly alone, and think of yourself as an individual, a maverick, a wild card, a free spirit, and anyway your office parties would be embarrassingly sparse.
|Not that businesslike, really.|
Yes, despite my unbusinesslike demeanour, I’m self-employed which makes me a business called ‘Valerie Laws’, and I’m also a ‘sole trader’ which sounds more romantic and a bit piratey. I’m sure you’d like to be that (paging Julia Jones!)
|Wouldn't mind photocopying HIS bum..|
How can you tell if you are self-employed? First of all, you say you are. You don’t have to get a t-shirt printed or owt. Then you become ‘self-assessed’ for your taxes (even if you are also employed a bit as well by someone else) and hopefully you pay some NI contributions at the fairly low rate of the self-employed. The self-assessed bit is important as it’s how you prove you’re a business to tax people and Amazon. It cuts no ice with them that you want to be alone like Greta Garbo, a creative soul in a garret forgetting to buy cornflakes. You can do all that in your spare time.
|I said you DON'T need a t-shirt!|
As a result, for years when I was, surprisingly, making a living as a writer, I paid far more tax than I should have, from a not very big income. You see? Stupid. I’d heard you could claim things like heating your study and the like, but it all seemed a bit scary and complicated. Then I found an accountant, through a writer friend.There are some who specialise in writers and artists, and know what we are entitled to claim as business expenses, some of which may surprise you. You can do your own tax return without one, having learned all about the exact details of how much of each category you can claim for, but it may be worth paying (perhaps about £350 per year) for an accountant to do it.
If you are a professional writer (‘sole trader’ remember) you can claim as business expenses all or part of such things as: phone/internet/mobile bills, equipment like anything computerish or paper or stamps or ink cartridges... but there’s much more. If you are a writer, a lot of your life is research for writing, and you can claim all or part of that. All the books you buy in whatever form.
|'Not now, I'm working.'|
If you appear in public (signings, readings, talks) you can claim for clothes, shoes, accessories, hair do’s; subscriptions to charities or writing-related bodies; costs of producing your books (editors, books you buy from publishers to sell at your events...): all this and more can be totted up by the accountant and the total is subtracted from your income, effectively ignored for tax purposes.
It might save you thousands a year. You need to be strictly honest of course and to have proof, in the form of receipts and tickets, so start collecting them now (all of them!). Start listing your trips and mileages, or just get them from your calendar/diary.
That’s just a brief glimpse of the world of business expenses, the honest kind, not duck-houses and moats and second homes down the road from first homes, we’re not MPs! Some of you will already be doing this, and wondering if such innocents really exist, making voluntary presents to the Revenue. But I was one such. And I believe many other writers are too, from what happened when we Brits faced our tax situation in the US. If your books sell on amazon.com, yes even a few of them, the IRS over there will grab 30% of your earnings before that cheque with ‘Wells Fargo’ incredibly printed on it (cowboys and sole trader pirates! How cool are we!) plops through your door.
|MY ROYALTIES FROM AMAZON.COM ARE A-COMIN', YEE HAH!|
|Very nice people really.|
In order to do all this you need a special number. This number could be gained in two ways, one (ITIN) as an ‘individual’ and one (EIN) as a ‘business’. The first one involved not only filling in forms but actually travelling to American embassies and all kinds of bother. The second could be done in half an hour and a nice chat on the phone with a lovely lady at the IRS. Yet even I, knowing I’m a sole trader, nearly chose the ‘individual’ route, so powerful is our self image as writers. Doh! Quite a few people did it the hard way though, and on facebook some very successful best-selling writers were lamenting about having to do that until I broke the news that they are in fact businesses. There’s a very helpful blog post for doing all this which may still be useful to some of you
And on Christmas Day, Boxing Day, and the 28th, Authors Electric are going to be offering books – oh, for bird-seed!
Drop by and find out which books and which authors, and where to find them…
For years I was a self-employed play therapist/consultant - so understood the whole administrative package, and had a wonderful accountant who did the tax-thing for mr (so wonderful that, when I went travelling, he was my power of attorney, so made sure there was always money in an account I could get at
But now - that felt like work. And writing is such fun I find it really hard to take the admin side of it seriously. I know ... must try harder.
Good to know that Amazon is now helping to sort this issue and accepting an EIN.
Some online selling companies started demanding a ITIN so I quit using them, not wanting to give my 30% to America. (Though I think there is a way on the UK Tax return form to declare tax witheld by USA and get it offset somehow... that would be another worry though.)
Tax forms put me into a complete melt down with the fear of being told off for getting it wrong!
An EIN will help considerably, I'm sure.