Did you know that the selfemployment tax rate was a mere 2. Selfemployment taxes are contributions made to social security and medicare, generally through quarterly payments known as estimated tax payments. Many people view the selfemployment tax as a discouragement to entrepreneurship, but the irs does a couple of things to reduce the sting. Selfemployed individuals tax center internal revenue. Createspace, kdp, ingram spark, lightning source is the name of your publisher. You need to take into account the selfemployment tax about 15%, federal income taxes, state income taxes if you reside in a state with its own income taxes, and possibly others. S the self employment tax is a social security and medicare tax on the net earnings of self employed individuals in the united states. Up until april 2018, it was also a platform where authors could hire the selfpublishing services needed to produce a book. The ultimate selfemployment guide to filing estimated taxes. Plenty of authors and publishers were left with towering piles of unsold books that they had invested considerable sums of money in.
If you pay too little, but not excessively so, you pay it at the end of the tax year. A tax cheat sheet for kindle ebook selfpublishing turbotax. Publications and forms for the selfemployed internal. May 07, 2015 when you begin to self publish your own books, one of the many questions that you will be asked by whichever distribution platform you use e. You can deduct ordinary and necessary expenses for operating your business as a selfemployed person. Tax withholding and specific requirements vary based on whether you are a u. The employerequivalent part of ones selfemployment tax can be deducted when youre trying to compute for your adjusted gross income, although this will only affect your income tax and not your. This will send an email with a link to your createspace account email address within 3 hours. After monthsmaybe even yearsof dedication and an encounter or two with writers block, youve finished your ebook. Selfpublishing success through createspace by joel friedlander on july, 2010 11 comments our speaker at the bay area independent publishers association baipa meeting this past saturday was selfpublisher and blogger christy pinheiro of passkey publications. These expenses may include supplies, utilities, advertising, contract labor, insurance, licenses and fees, subscriptions, dues, and so on. Kindle direct publishing kdp is an amazon selfpublishing service. Mar 30, 2020 before paying your self employment taxes, you need to firmly establish which class your business falls under, as the tax rules vary by classification.
Publications and forms for the selfemployed publications and forms for the selfemployed more in file. Tax season is upon us, and if you run a small business or work for yourself, its time to get serious about getting your filing in order. Earned, nonemployee income selfemployment tax hits your income from doing. Book royalty tax reporting for selfpublishers isbn us. The employerequivalent part of ones selfemployment tax can be deducted when youre trying to compute for your adjusted gross income, although this will only affect your income tax and not your selfemployment tax. Posted by ryan guina last updated on june 5, 2019 legalaccounting, taxes advertiser disclosure. Aug 14, 2016 self employment can be hard, but if it was easy, everyone would do it, right. Beginners tax guide for the selfemployed turbotax tax. Paying uk income tax on book royalties uk authors self.
You cant receive money from any of these organizations without tax information. If you are self employed, you are responsible for paying. The stepbystep guide to formatting your print book for kdp. Self employed tax solutions is written for bright, intelligent people who dont understand the tax implications of their solo ventures. Publishing imprints how to selfpublish and sell your book. Createspace is the easiest way for an average person to selfpublish their book because it publishes books directly to amazons sites all around the world.
When i attempted to fill out my tax information on createspace, this article about tax information opened. When you begin to selfpublish your own books, one of the many questions that you will be asked by whichever distribution platform you use e. Estimates based on deductible business expenses calculated at the selfemployment tax income rate 15. Winter is a booklover who has been selfemployed for over 37 years. I numbered them just to keep count, not to suggest. Have you ever wondered if selfpublishing could be your ticket to a better life. You have to get so many things perfectly right if you hope to be successful. This indispensable book will help you survive and succeed in a business environment where the tax laws and regulations are structured not for indies but for corporations and employees. Mar 29, 2019 how to calculate self employment tax in the u. You can sell your print books wherever you like while using kdp print on demand pod publishing.
You cant receive money from any of these organizations without tax. It is similar to the social security and medicare taxes withheld from the wages of employees who receive a form w2. Before you submit your book to kdp, you need to format it so it meets our quality standards. Youve heard that selfpublishing for amazons kindle is a breeze, so. Selfemployment tax includes social security and medicare taxes. Createspace and taxation information lorraine reguly. Selfemployed tax solutions is written for bright, intelligent people who dont understand the tax implications of their solo ventures. If selfemployment is the opposite of employedbyother, than a job is outsourcing your freedom time and talent to a boss. Sorting out your amazon 1099misc forms from kdp and. You can publish your books in digital and print for free and sell on amazon to millions of readers. It is similar to the social security and medicare taxes withheld from the. Everything you need to know about how to lower self. Self employment tax guide what you need to know to avoid costly penalties.
When youre selfemployed, the tax process becomes a. Selfemployment and taxes file taxes online w free tax. Createspace is a platform for authors to publish books to amazon, a role it seems to be continuing this service for now. Completing your amazon tax interview quids and quills. A tax cheat sheet for kindle ebook self publishing. If you are selfemployed then technically you have to pay class 2 national insurance contributions nics and complete a self assessment tax return each year on the tax return you. The social security tax is comprised of medicare 2.
It sets forth information for both us publishers and nonus publishers. You only fill this in if you are resident for income tax purposes in a country other than the one in which you live. Mar 02, 2011 10 tax benefits for the self employed. Many people view the self employment tax as a discouragement to entrepreneurship, but the irs does a couple of things to reduce the sting. We now offer specialized options for your different publishing needs. Freetaxusa free selfemployed income tax preparation.
S the self employment tax is a social security and medicare tax on the net earnings of selfemployed individuals in the united states. Our speaker at the bay area independent publishers association meeting this past saturday was selfpublisher and. If all youre doing is selfpublishing with amazon kdp, smashwords, etc. Sign in to kdp to link your kdp account or create a new account. You can deduct ordinary and necessary expenses for operating your business as a self employed person. Jan 11, 20 if you are selfemployed then technically you have to pay class 2 national insurance contributions nics and complete a self assessment tax return each year on the tax return you include your income from employment, any income you get from savings and investments and on the selfemployment pages your income from your book sales. Freetaxusa is the best free tax program i have found, simple to use and also has free 1040 selfemployment filing, which i havent found with any other. You can now manage your createspace content on amazons improved publishing services. I obtained my kdp tax forms online, but received my createspace forms in the mail on february 5. How to self publish on createspace in three easy steps. Actual results will vary based on your tax situation. Now amazon will tell you what the tax treaty benefit is, if there is any, for your country.
To learn about the process for validating my tax information. No, you dont need to set up a business to selfpublish a book. When youre self employed, the tax process becomes a. Enter your createspace email address and click submit. Ok, now that you know what selfemployment taxes are and who has to pay them, lets.
In an attempt to lighten your load and ease your burden, whether you are just trying to make the october 17 tax extension deadline, figuring out estimated taxes, or are gearing up for next tax season, take a look at these six tax tips for the self employed and some of the most missed tax deductions. Authors blake webster and steve boga show you step by step how to use. What selfpublished authors need to know about taxes. Selfemployment taxes beginners tax guide for the selfemployed. What you should know about selfemployment taxes taxact blog. Feb 11, 2020 publications publication 15, circular e, employers tax guide publication 15a, employers supplemental tax guide pdf publications and forms for the selfemployed internal revenue service skip to main content.
It is similar to the social security and medicare taxes withheld from the pay of most wage earners. Tin taxpayer id number for individuals you may apply for an individual taxpayer identification number itin by filing form w7, application for irs individual taxpayer identification number. Publishing a book is like starting your own business. However, the answer to this question and many more rests within an understanding of filing business taxes for the selfemployed. Build your book format a paperback manuscript word for windows build your book format a paperback manuscript word for mac.
Book royalty tax reporting for selfpublishers posted on. How to selfpublish your book the createspace way is an essential reference for anyone writing or planning to write a book. A stepbystep guide to writing, printing and selling your own book using print on demand webster, blake, boga, steve on. General faq selfpublishing faq book printing faq bookbaby. You can use kdps free tools to prepare your book and publish quickly. Thats right, for selfemployed people, tax time comes four times per year, and youll almost always owe money. With a fortyplus percent share of all books sold and sixtyplus percent of the online book market, amazon is by far the biggest market that you can reach as a selfpublished author. Apr 09, 2020 sidehustling, selfemployment, and entrepreneurship offer the promise of financial flexibility, but four times per year hustlers feel some pain. Hundreds of deductions, writeoffs, and credits built into the online software. Login to get started with kindle direct publishing, manufacturing on demand, or print on demand for publishers. In general, anytime the wording self employment tax. Before paying your selfemployment taxes, you need to firmly establish which class your business falls under, as the tax rules vary by classification. If you are a w2 employee, your employer pays half of the social security taxes 7.
In the past, self publishing a print book was expensive and risky. Tin taxpayer id number for individuals you may apply for an individual taxpayer identification. This payment covers your required contributions to social security and medicare. This indispensable book will help you survive and succeed. And of course, clear them all out in the new year, to get ready for the next tax season. No, you dont need to set up a business to self publish a book. Popular self employment books goodreads share book. Selfemployment can be hard, but if it was easy, everyone would do it, right. She is also the author of making a living without a job and seminar in a sentence, as well as the publisher of. Prepare your book self publishing amazon kindle direct. Follow the email link and confirm your createspace account information is correct. Freetaxusa is the best free tax program i have found, simple to use and also has. Selfemployed individuals tax center internal revenue service.
You may have to pay selfemployment tax as well as income tax if you made a profit. Stash them in an accordion folder and categorize them as you have on your excel sheet. Ok, now that you know what selfemployment taxes are and who has to pay them, lets jump into the strategies you can use to lower your selfemployment taxes and bank more of this years income in the process. Sales, royalties, taxes tax information applying for a u. Sidehustling, selfemployment, and entrepreneurship offer the promise of financial flexibility, but four times per year hustlers feel some pain. You can earn up to 70% royalty on kindle ebook and 60% on paperback sales. While selfpublishing a book on createspace, they dont. In an attempt to lighten your load and ease your burden, whether you are just trying to make the october 17 tax. Feb, 2017 tax season is upon us, and if you run a small business or work for yourself, its time to get serious about getting your filing in order. Createspace indie print publishing made easy acx indie. Filing a form 1040 schedule c could qualify you for an earned income tax credit or eitc. Why use services like createspace versus selfpublishing.