Tax Questions Answered by Christine Duncan Okay, all you non-American folks, this will be boring to you–and to a bunch of the U.S citizens too. But a couple of questions have come up in regards to taxes and I thought I would take a minute and answer them.
First off, I got a question the other day about selling your own books in the back of the room after you’ve done a talk. If you do that, you have to (hopefully charge) and pay sales tax. It’s not hard. You can request the form from your local department of revenue, sales tax division–but you ARE supposed to be charging sales tax. They will even tell you the percentage you should charge. Bring along a calculator the day of your book sale, if you must, but really you can figure the amount out before hand per book and bring along a cheat sheet to remind you. I don’t make the rules so it’s no use griping to me.
The second question I got lately–more of a whine really–was that the author doesn’t make that much money from writing. So she told me, she didn’t have to pay income taxes, right? Wrong. You owe if you made as little as ten bucks. If you netted more than 400.00, (in other words you had $400.00 left after expenses like buying those books you sold at the back of the room) you have to file even if you didn’t make any other income.
If you did make a profit, you should think about filing a schedule C. It really isn’t all that difficult. If you can read, you can do this. Turbo tax or one of the other tax softwares will help. Frankly, my writing income doesn’t run to anything more expensive than that, but if you insist, there are plenty of places that will help you–including the IRS help line.
If you really didn’t earn much then you can put it under hobby income if you like. But how many of us really consider this a hobby?


One response to “Tax Questions Answered by Christine Duncan

  1. Getting a sales tax permit is absolutely essential. I remember last year when I got whacked with a stiff penalty because I didn’t know I had to get a sales tax permit from my state to sell my book.

    I was able to get it waived (ignorance is bliss excuse), but here in Connecticut not only do you have to get a permit, but you have to file quarterly taxes as well, even if you didn’t sell anything in a particular quarter.

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