Kelly – Page 4 – Red Door Sentinel

Getting Ready for Taxes

The best advice I received when asking about filing taxes was to treat being an author like a business. This way you can record it as a business (and not just hobby income) on your taxes.

If you keep track of these things starting right now, it will be much easier to do your taxes. You could create a Living Document that contains the following:

Dates and times spent writing, editing, formatting, and anything else that has to do with your book
Every single expense (paper, ink, web site, proof copies, reference books, electronics that are only used for the book, etc.) – keep receipts
Editor, Formatter, Cover Designer fees
Mileage (date & time) for speaking engagements, as a vendor, or author events
If you use one room in your house to work on your book (it can’t be used for anything else), then this room can be calculated into a deduction
Number of books you sell personally (I keep a box in my car)
Income of books sold personally
For books sold online – online retailers have number of books sold and royalty information

See this post about Filing Taxes for more information.

Filing Taxes

These are just some basic guidelines.

State Sales Tax

You only need to pay on the royalties that you receive. You will get a 1099-Misc from Amazon (or where ever your books are sold). Use this to file with your state. If you buy books and sell them personally, you paid sales tax when you bought them.

State Income Tax

If your state has an income tax, you will need to report your 1099-Misc and the sales that you made in person.

Federal Income Tax

You will need to include the 1099-Misc and the sales you made in person.

If you consider being an author a business then you will need to fill out either a Schedule C (under $400 profit) or Schedule SE (more than $400 profit). This requires that your business is filed with your state and that you keep track of all expenses related to being an author.

NOTE – I am not a CPA or tax professional. I also do not know your specific financial situation. If you are unsure about anything to do with your taxes, please consult a professional tax preparer.

Who Should I Hire?

Some things are best left to the professionals.

Cover art – this is the very first impression that you have with complete strangers. A cover will either say, “I didn’t put any money into this, don’t bother” or “I created this book with excellence and I value your time.” The latter will get a click in Amazon or get someone to pick up your book in a store. I highly recommend KL Cooper with UnderCover Press.

Editor – No matter how many times you go through your book, no matter how many friends read through it, no matter how many times your spouse goes through it – unless they get paid to be an editor, don’t stop with them. Shell out the cash and get a professional to look at your work. I highly recommend at Destiny Writers.

Formatter – If you are good with MS Word or Adobe InDesign and you have A LOT of time, you can do this yourself. It took me about three months to do my 318 page paperback and another month to do my eBook. Formatting a paperback involves a lot more work than an eBook.

Marketer – When considering hiring someone else to market your book, be sure to measure the cost. This can turn into a dark hole fast.

Beware when hiring from Fiverr.com. Most people who advertise there are across the globe from the US. The time difference, language, and war outbreaks can make it hard to work with them. Also, you will most likely pay more than what is advertised.

I also suggest finding author groups on social media that can answer your questions and be a wealth of information. Whatever or whoever you use, be sure to get good references first (don’t be afraid to ask for them).

Finding an Editor

My editor, Destiny Writers, was a joy to work with and I highly recommend them!

When looking for an editor, I recommend joining social media writing groups who can make recommendations. It is important to hire an editor who will be in touch with your topic.

For instance, it was important for my editor to be familiar with the Bible. Along with editing, I was hoping for an editor who would be sure my writing did not conflict with Scripture.

Have at least one chapter ready that you can send as a sample to those you might hire. I chose a chapter that provided an overview of my entire book. Do not be disappointed if it takes a while to find someone who is a good fit. I was rejected a few times before finding Destiny Writers.

When I began working with my editor, my manuscript was far from finished. Our relationship began with coaching and moved into editing as I completed portions of my book.

Working with an Editor

When my editor began sending me his edits, he said something that is great advice for all first time authors. “Don’t be put off by all the “red ink.” When you wrote this, you were focusing on what to write. My job is to focus on how you’ve written it.”

The best tool to use for editing is MS Word. Send your editor a copy of your latest manuscript. When you get it back, I recommend either making the changes to your original or changing the one you get back. You should retain the editor’s copy in your email program.

Your editor should use the Review tab to add comments and make changes (enable the Track Changes button). If you decide to use the same copy, you can Accept or Reject those changes (Review tab) and delete the comments.