We are keeping this rolling with the next factor to keep in mind as you're making decisions about what route to pursue in the publishing industry! This is my absolute least favorite piece of publishing.
Like I've said in parts 1-3, I think there are 5 main things to consider when making choices with your work! And I am just one perspective, so I encourage you to look at a lot of different opinions. I will focus on three types of publishing: Traditional, Indie Publishers and Self-Publishing. So what are some of those factors? Cost, Control, the Business-Model, Branding, and Timelines!
So let's get at it. The business side of making decisions in publishing!
This isn't an aspect that I want to break down into categories, but rather, I am going to touch on a few business-model components that have made publishing both easier and harder!
Truly, the two biggest things that caught me off guard was the various business components that I have had to learn: taxes and accounting. I went the route of Filing for a LLC, because this allowed me to file as a reseller, open a bank account, and market as a business as well.
Accounting: I honestly didn't track this as closely when I was with a publisher, but I probably should have been. I keep a ledger of all income and expenses, as well as saving all of my receipts. This helps you so much when you go to do your taxes, as you'll already have all the information ready to go. You should be tracking any expenses you incur with your books. Regardless of which route you go, professional or hobby, it is worth it for your taxes to keep track of things like: Mileage, Utilities Used for Writing, Office Supplies, Marketing Costs, contractor costs, and more!
Taxes: I had no idea how complicated the taxes of publishing could be. The biggest thing to know is that most publishers require you to report any income from sales on your own. The distinction you need to make is whether you report your earnings as "self-employed income" or "Hobby Income". The real distinction you need to make is whether or not this is for profit or for fun.
When you are self-publishing, this gets fuzzier. You'll need to identify hobby vs. professional income as well, but as you move into higher income, you'll need to identify whether or not it makes more sense to simp
ly be self-employed or to file for an EIN and create a business out of your writing.
If you do file for an EIN, know that you'll need to register as a reseller in your state, file state taxes. What I ended up learning was that you'll need to also make sure that you sign reseller certificates with your product printing services so that you don't pay taxes upfront. Sales taxes are added at the end of the sale. I still don't charge additional taxes to my customers, but I promise, it will make your state taxes make more sense if you get it set up properly! Last thing to really know is that, if you begin making more money than you spend, you'll need to pay income taxes on your income as the Earner & as the Business Owner. My best advice is to work with an accountant. I was against it based on cost, but quickly changed my mind! Shout out to Glen!
And none of this is the fun stuff, so when it really starts to suck, go back and do some of your writing. HOWEVER, get it done so that you're organized!
This stuff makes me cringe, but understanding the ins and outs of your taxes, accounting, and the requirements once you've filed for an EIN are super important! It's hard to break it all down without boring myself, so if you have specific questions, please don't hesitate to reach out and ask!
And please join the journey, follow our fun on Facebook, Twitter, or Instagram with the handle: @dreambuiltbooks