The first thing you want to keep track of is income. What is income? It’s money you are paid by publishers, usually in the form of advances or royalties, for the sale of your articles, or books. Be they magazine articles, ebooks or print books, if you are paid, it’s considered income by the Internal Revenue Service.
Okay, you new authors out there can stop ROFL. If you keep writing, being published, build up a back list, and a readership, you’ll have income. It takes time. The same as it does with any other business. If you’re multi-published by different publishers, you’ll want to keep track of income to be sure you’re receiving the correct royalty amounts from each publisher.
Remember, mistakes happen. If you are not paid the correct amount, discover an error on your royalty statement, or whatever, it is up to YOU to figure that out, and let your publisher know. Sure there are some crappy publishers out to get your money, but for the most part, publishers are also in business. Before you get mad because you know they are out to get you, take a deep breath. You are a professional. Contact them and let them know you’ve discovered an error. I’m sure they’ll be glad to be alerted, and work with you to correct the problem.
One last thing about income. It’s taxable. You’ll want to be sure withhold part of it to pay the taxes on it. I recommend one third. But then, I like to be sure I have enough put by. If there’s some left over after payment, I reinvest it in marketing, but that’s another post.
NOTE: These are suggestions only, and should be viewed that way. Please contact a tax professional in your area, for income, expense and tax advice.
I like to keep both electronic and hard copies of all my royalty statements -- the hard copies are much easier to work from when tax time comes...
ReplyDeleteWhich is NOW, isn't it? No, I still haven't sorted those receipts...