Monday Mailbox~ Self Employment

Today is Monday and time to answer your questions.

Jo, You came from a business background. I got a shock when I took all my 10-99s to a tax professional this year. I am a business! How do I prevent my sticker shock when filing for 2013? JG

Good question! I wrote a guide on the business aspects of indie publishing. Originally it was free at Smashwords and I gave away the first 2,000 copies. Now it's priced at $.99. Eventually, I will get around to completing the full book when my mind heals some more. This guide now has a 5 star rating.

Most indie authors and traditionally published authors have the problem of not looking at themselves as a taxable business operation according to the IRS (Internal Revenue Service). AND if you are lucky enough to live in...

• Alaska
• Florida
• Nevada
• South Dakota
• Texas

There is no state income tax to worry about. You lucky dogs. <G>

The 10-99 gives a specific amount you earned from your publisher(s). This amount is the taxable income you have to pay taxes on if its over $500. Believe me, I've prepared and gotten a few thousand of these every tax season for 15 years.

Think you can just not claim them, nope a copy is mailed to the Social Security Administration and sent to the IRS before the middle of January each year. They will send you a nice letter, at first, reminding you that you forgot to claim this income and they want their money. If the government OWES YOU money, they don't care, but if you OWE THEM money, they'll hound you about it and even seize your bank accounts.

I always thought it was wrong that you could only file 3 years worth of back taxes for returns, but they can demand payment for up to 7 years on back taxes. This year, I finally disposed, shredded and composted the last of my business consulting records from when I was in business. I was required to keep all documents for ten years!

I live in Georgia and I know my tax rate. Between state income tax and federal combined, the percentage is roughly 13.7%. Find out your state's tax percentage. Now for 2012, the federal tax rate changed taking a bigger chunk out of everyone's pocket. We found ourselves in a larger tax bracket. Higher bracket equals higher tax rates. So much for Obama's campaign promise of only taxing the rich. <sigh>

That's why as a general rule, every time I get a royalty check or payment for services rendered I withhold 20% of that income. It gives me a cushion for increases. I put it in a savings account to draw interest but I do not withdraw any until tax time. I'll round it up to the nearest dollar if need be. For a simple wedding I may have gotten paid $25, but $5 went into this account religiously.

As a published author, I am self employed. I run a business. Whether you use your Social Security number and set up as a DBA (doing business as), in other words, a sole proprietor or LLC (limited liability corporation), or S Corp (incorporated under sub-chapter S of IRS code). There are various tax advantages for each LLC or S Corp that don't apply to a sole proprietorship.

Why am I talking about this now that tax season is almost over? To give you time to plan for 2013 tax season, of course.

Keep writing and loving the Lord.

Tuesday Tumbling Terms~ Blog/Website

This week's Tuesday Tumbling Terms for the writer is Blog/Website.

blog
noun
1. a Web site containing the writer's or group of writers' own experiences, observations, opinions, etc., and often having images and links to other Web sites.
verb (used without object)
2. to maintain or add new entries to a blog.
Origin: 1995–2000;  shortening of Weblog

Web site
noun
Computers. a connected group of pages on the World Wide Web regarded as a single entity, usually maintained by one person or organization and devoted to a single topic or several closely related topics.
Origin:  1990–95 

As you can see they are basically the same, if you choose to use it this way. You can incorporate a blog into your website, if you want. 

Yes, with a website you get your name as domain name. It costs money to register the domain. It costs money to maintain the site because if you are not a programmer fluent in html forget about it. Website designers make a killer of a living because charge for each additional update so the page basically stays the same. Sure, you can DYI it, but again there is a cost for the program and domain name.

People like change as in updates and possibly a new look when they stop by. They are a fickle bunch. They get bored easily. Why stop by a website unless you are going to buy something? If you are looking for something to buy, you don't care so much about how a site looks. For example, take a look at Ebay, or Amazon. Every decade or so they will revamp their overall look, but they basically stay the same. I've visited author sites that don't change unless they publish a new book and that's an add-on. Why would I want to keep coming back to the same information to reread? Today, the speed of information on the web changes by the minute or hour.

Wait, I get that with my blog too. (jomurphey dot blogspot dot com) It is mine exclusively as is The Murphey Saga. No two blogs can have the same name. No fee for domain or updates. I can update daily or several times a day if I want. I have full design control over what my background looks like. See my books in the background? Neato, huh? I think I finally found something that screams "memememe!" I can change the format, text size, and a host of other things with a click of my mouse. Do people return to my site often? You betcha. I always have something interesting to say...er, um, maybe.

But the bottom line is exposure. No, I'm not talking about flashing or streakers. Get your mind out of the gutter. The more it changes the more readers I get. The generation of readers increases possibility of sales of my books. Yes, I'm exposing myself in a decent way. You really want to know someone or the writing style of an author you might want to read...stop by their blog.

So do you blog as an author? Send me your link.

(Just so you know spams will be deleted)

Keep writing and loving the Lord.