Tuesday, April 15, 2014

Takin' Care of Business

Happy tax day! (And also, coincidentally, the 19th anniversary of the date I started teaching English.)


So did you know that if you publish books on Amazon or Nook or Createspace or Smashwords, then you're actually self-employed?

Well, I didn't.

Last year I put the money I made from books down on Schedule E as "income royalty from copyrighted material"; this year there's a warning on TurboTax not to do that, I guess since so many people are self-publishing books and podcasts and whatever now.

So now I have to put it down on  Schedule C as the "sole propietor" of my own business.

Even though I'm fully employed as an expat English teacher, I'm self-employed as a writer.

Long story short: I made about the same amount of money from books in 2012 as in 2013 (about $10,000 each year.) Last year I paid $542 in taxes.

This year?

I just paid $1550.

About 15 percent, you see. That's the "self-employment tax." (Which, it seems, will go into Social Security, which will be the first time since 1996 I've paid into that.)


Now there are deductions you can take on a small business; but this year, I didn't feel like wrasslin' with it. My father got audited last year over a small business he runs (repairing and selling old guitars) and he warned that if they come a-knocking, you better have all your paperwork.

I don't. Not yet, anyway. (And honestly, of course, my expenses as a writer consist of pretty much just jack and shit.)

I find that in a weird way, the big tax payment has galvanized me; hey man, I'm a small business owner! I never thought of it that way before. It was a hobby, an outlet.

But now it's business. I can actually pay for advertising and stuff, and deduct it from my taxes. One acquaintance who writes e-books said he wrote off $500 worth of "research materials" which is definitely food for thought.

And if I write about some trip I took, like the trip to Vodkaberg last year, does that mean I could try to write off plane tickets and such?

I'm going to contact a professional, or at least do a lot more research, before I try something like that, though. They got Al Capone and Wesley Snipes, they can surely take my (or your) sorry ass down.


Another annoying downside of this: if you're self-employed, you're supposed to file quarterly estimated payments for your projected taxes for the current year. How's that for sucky? 

I'd like to hear from any other self-employed "digital nomads" (sigh) out there how you're dealing with all this bullshit. Since I have so much (untaxed) money from English teaching this isn't really a problem at the moment, but if I was trying to live only on the e-book money this would probably be an intolerable dick up my ass. 


I've been busy writing more porn, but I'm about to get seriously to work on the next memoir. I've got the outline and framework; time to fill it with meat.

I took on English teaching and Southeast Asia , I took on debauchery and "sexpatriation" and Russia -- NOW it's time to turn my jaundiced eye on middle age, self-improvement and survivalism, "location independent work" and self-publishing, America, the Kingdom (where English teachers go to die), and a completely nostalgia-free look back at the 80s and 90s, including my experiences backpacking.



Anonymous said...

What are you, some kind of communist? I deal with my taxes like most expats by ignoring them!

Anonymous said...

Canadian self-pub authors have been getting burned lately for not declaring foreign (mostly US) income. The government can track money transfers much better than they could 5 years ago. I say, best to play it by the book, especially if the government tends to audit. I don't declare it as "self-employment income" but "other income". Is it the right thing to do? Maybe not, but no complaints by The Man thus far.

Matt D