Categories
Indie Publishing Business Self Publishing

Getting Your US Royalties Tax Back – Non-American Authors – New Zealand Edition

It’s exciting – Amazon sent you a¬†ROYALTY CHECK¬†it’s less exciting when you notice they’ve withheld 30% of the gross amount for taxes ūüôā The money is not gone forever though – as a non-US resident author the process of getting your money back is not difficult. It involves some phone calls and a some paper work – that’s it. The process has simplified in the last year or so – so if you’ve found a guide which starts talking about needing to get an “apostilled” coy ¬†of your passport – that’s all nonsense now. Here’s how it works 2013. ¬†

The overall process is: 

  • get an US tax number called an EIN (NOT an ITIN – that way is the way of apostilled copies, Form W-7 ¬†and other nonsense). Even if you are a sole-trader, as I am, you can get an Employer¬†Identification¬†Number – it’s perfectly legit as a non-resident alien (as Americans so charmingly call foreigners) and MUCH easier than getting an ITIN¬†
  • tell Amazon and Smashwords of your new EIN – using a W-8BEN form this will stop them withholding 30% (the actual amount they will continue withhold depends on your country of tax residents: for New Zealanders it’s 5% for Australians 0%)¬†
  • if you have had any royalties withheld already – you will need to claim them back from the IRS (US tax department) using a 1040NR form. ¬†UPDATE: You won’t get your previous over-paid tax back unless you go through the trauma of getting an ITIN
New Zealand Does Some Things Well: Lamb, Scenery, and Simple Tax Codes come to mind
New Zealand Does Some Things Well: Lamb  and Simple Tax Codes come to mind

Getting an EIN (Employer Indentification Number)

Before you call you will need: 

  • a way to call the US cheap: I use Skype my call was about an hour and cost about 10c – most of the time was on hold – so I wouldn’t use Telecom for this!¬†
  • plan the time of day/week the IRS office is open 7am-10pm Mon-Fri – but general advice appears that they are busiest in the mornings and less busy in the evenings. ¬†You are calling Pennsylvania – so that is approximately NZDT: ¬†middnight – 3pm Tues-Sat (timeandate.com for timezone conversions)¬†
  • a print out or on-screen copy of¬†Form SS-4 – it’s the form they are going to fill in on your behalf, so they ask if you have a copy. YOU don’t actually¬†need a copy¬† -just have it on a screen near you to follow along.¬†

The details are: 

  1. Call  001-267-941-1099 extension #3. You are calling for an Employer Identification Number (EIN) NOT an Individual Identification Number (ITIN). 
  2. After a wait of between 5 and 60 minutes you’ll be answered. You aren’t allowed to be on speaker phone, so do this with a headset is my¬†recommendation¬†(means you can do some work while you are on hold).¬†
  3. They will ask you if you are applying for an EIN for a foreign entity Рthe answer is YES 
  4. Ensure that you give them a legal name that matches your legal name with Amazon and other places you sell your book and your records with IRD in New Zealand. The spelling is critical Рthey will go over it a few times. 
  5. You don’t need a trading name.¬†
  6. If your postal address is different from your¬†residential¬†one then again you will need to clearly spell it out. This is a unit used to dealing with foreigners and they seem un-perturbed¬†over my lack of a “state” or ¬†“province”.¬†
  7. You are a “sole¬†proprietor”¬†
  8. They will ask you if this is for compliance with withholding Рthe answer is YES 
  9. They will ask you if this is for e-books – the answer is YES. Or they may ask you what business you are in: “PUBLISHING” appears to cover it.
  10. They will give your EIN over the phone Рwrite it down Рand double-check the number. 
  11. Eventually the paper copy will turn up, mine went via the UK for some reason! That paper is VERY important, original document, ¬†not¬†the¬†cheap computer-generated print-out it looks like. KEEP IT SAFE you can’t get a copy – apparently.¬†

Telling Distributors about your EIN

You need to send a physical paper copy of a W8-BEN form to the places that have or will withhold taxes on your behalf. For most of us this is: 

  • Amazon.com
  • Smashwords.com¬†

Completing a W-8BEN

Go and get a copy of the form from the US IRS site here¬†-. Print it out nice and¬†legibly¬†on white paper with black ink. Find a pen – file it in so your name and address and your EIN ¬†the details should match those you just gave the IRS. Do not abbreviate. You don’t live in NZ – you live in New Zealand. ¬†Do not¬†photocopy¬†the completed form – do an original for each¬†distributor¬†you are sending it to.¬†

Question 9

cross a) and enter New Zealand 

cross b) leave the rest blank 

Question 10

For New Zealanders the answers are: 

article 12 

rate 5%

type of income: royalty

Sign and date the form and send it to: 

Amazon:¬†address for W8-BEN¬†Amazon will send you an email in a few weeks to acknowledge receipt and in your next cheque you’ll notice the different rate of withholding applied.¬†

Smashwords: address for W8-BEN Рupdate the EIN on your account page, and send to the address provided. Once received the hold for payments will be automatically removed and the withholding rate changed to 5% 

You apparently have to re-do this print out and mail nonsense every three years. 

I Want My Money Back! 

If you did all the above before you sold any books then you can stop now. However, for the rest of us who  have procrastinated about getting our tax affairs in order, and will now have to one more fun step to get your cash back! 

Smashwords defaults to holding your royalties until you have filed a tax number with them, as they only pay four times a year, it’s worth timing getting your EIN to fit with their payout dates. Amazon however may well have withheld more tax than is necessary. Amazon can’t give it back to you – only the IRS can do that. ¬†

The US tax year ends on the 31 December Рand some time afterwards Amazon will send you a 1042-S РI  received mine in March Рso the timing is not bad for the NZ tax year date of 31 March. 

The 1042-S states how much Federal Tax has been withheld and your gross income.  

For New Zealanders you can get most of that back. The last 5% you claim against your New Zealand tax. No you can’t just claim it all against your NZ tax – only that 5% which is legitimate under the relevant tax treaty.¬†

Filling in a 1040NR Getting Your US Tax Back

Okay the form you can find here: The instructions all 19 pages Рhere. 

You will also need your 1042-S from Amazon (and any other US distributors) which say how much tax has been withheld. 

I’m making some assumptions here: you aren’t an expatriate American, you don’t run a business in the US or have employees there. On page 4 of the instructions you should qualify for the “simplified¬†procedure for claiming certain refunds” . (Yes after this you will never hate the IRD again!).¬†

Basically if you are/have : 

  • non-resident alien
  • don’t have a business in the US
  • no income connected with a US business¬†
  • you don’t owe the US any tax¬†
  • you are using the form ONLY to claim a refund of tax withheld at source

You can now fill the form as follows: 

Page 1: make sure you name, addresses and EIN are as previously given to the IRS. Leave the rest of the page blank. 

Page 3: leave blank

Page 4: Royalties are item #5 enter the amount of Gross Income  from the 1042-S (box 2)  that Amazon sent you. Enter under  column (d)(Other Specify) 5% . 

Follow the simple arithmetic as indicated in lines 13, 14, 15 . This figure is what you owe  the US IRS (which you can claim back via your New Zealand tax). Copy this figure to page 2 line 53

Page 5: answer all question. Most are straightforward and relate to your citizenship, residency and trips to the US. 

For item L leave blank

Now back to page 2 

You already have the estimated tax to pay on your royalties @ 5% on line 53

Line 60 Рis probably the same as line 53 

Line 61(D) is the amount Federal tax withheld from box #7 on your 1042-S form(s) (total if you have more than one). Enter this

Line69,70 Рsimple maths. 

Line 71A Рyou want the amount REFUNDED to you Рthey will send a US$ check to your postal address on page 1. 

Sign and date form. 

You’ll need to attach part of the 1042-S send to you from Amazon (Copy C – attach to any Federal Tax Return). Attach form to the left margin of page 1.¬†

Mail to 

Department of the Treasury 

Internal Revenue Service 

Austin, TX 73301-0215

USA 

The return is due before the 15 April, though as they owe you money I don’t think they will care if you are late! ¬†

Update: Unfortunately all I got back was a letter telling me EIN ¬†did not match an SSN or ITIN. I called and after talking to several people at IRS I discovered that I couldn’t get my overpaid tax back with and EIN. Most annoying!¬†

 Standard Disclaimer: I am not a tax accountant, but I have done taxes in a few countries Рand I have great deal of sympathy for my American friends who have to deal with level of literal paper work. 

Your mileage may vary Рif in doubt Рcheck with a tax professional. 

Categories
Indie Publishing Business Rants Self Publishing

Self Publishers of New Zealand – Indie Authors Doing It For Themselves

I went to Tauranga on the weekend – but I didn’t take these pictures. While my partner¬†gallivanted¬†around the beaches and cafes of the pretty Bay of Plenty town, I sat in a conference room at the Kickstart conference¬†organized¬†by OceanBooks and TheStoryBridge.¬†

Yeah I know – I’m never at home! Last month Sydney, this month Tauranga – and in both cases I got the prize (which BOTH conference¬†organisers¬†have forgotten to deposit in my bank account), for “attendee from furthest ¬†away”. ¬†It’s a deliberate strategy though. I feel that ¬†I straddle the world of writers and marketers. Although I’ve never really considered¬†myself¬†a writer I’ve probably earned more from my writing than many self-titled authors. Even though in general my grammar ¬†sucks ¬†my spelling is worse, and my proof-reading random. (I installed the AfterTheDeadline plugin, have you grammar-Nazis seen an improvement?). So I’m trying to learn more about this weird author world, particularly the off-line part.

View from the top of Mt Maunganui across the beaches - I didn't take this photo -  I was sat on my butt in one of the buildings!
View from the top of Mt Maunganui across the beaches – I didn’t take this photo – I was sat on my butt in a Self Publishing conference one of the buildings!

Marketers Need To Understand The Value of Good Books

The fatuous nonsense spouted by the¬†pedlars¬†of programs like Fast Kindle Cash¬†don’t just scam the naive, lazy and gullible who join them, they also ¬†devalue the ¬†authenticity of the written narrative (oops the writer thing is rubbing off). ¬†

The marketing crowd is lazy Рand scared of writing, and too cheap to pay for good writing 

NEWSFLASH: Books require decent writing РEnd. Of. Story. Do it or hire the talent. 

Authors Need To Grow Up Too

On the other hand I am quite simply stunned that authors have been happy to turn over all control for not just their career but even their creativity (did you know that traditional publishers control a book’s cover, title and blurb???) to publishers in return for what? Ten percent? Glory? Dunno about you – ¬†I can’t live on glory. All on top of being treated as demanding scum by publishers, just because they ¬†ask a¬†publisher¬†to read their book within a¬†time frame¬†of weeks not months (and while it’s with one publisher you can’t give it to another!). Who has the resources to put their business on hold for 6 months for someone else’s timetable?

¬†Some authors have a book be accepted, only to have the publisher go bust before publication, and then have no other publisher willing to buy the rights because the book is “tainted” by having been previously contracted to someone else!!!¬†

Well writer types, there, as they say, some good news and some bad new. 

The good news is Рthat the gatekeepers are gone Рindeed your chances of being published in New Zealand with a traditional publisher is now ZERO (rather than almost zero in 2012) РJames George 

The bad news: you need to take control of your work, your career, and your business. ¬†If you “just want to write”, that’s cool – just don’t expect to sell books.¬†

You’ll need to finish your book, get your book edited, get your book formatted, and get your book in both print and electronic formats. You will then need to introduce your book to your potential buyers (aka marketing). ¬†

New Zealand Writers: The Future Is Here, and It’s Awesome

A few weeks ago I ¬†received the first 2013 edition of the New Zealand Author a paper(!) newsletter of NZSA. On the last page there was a long opinion piece titled: “Less Choice for Authors” by Geoff Walker¬†(if Geoff had a website I’d link to it).¬†¬†It ended with:¬†

Less choice for authors, less publisher diversity – for writers this isn’t good news.¬†

In my opinion he couldn’t be more wrong – indeed this is singularly the BEST time to be a writer since the invention of the printing press. ¬†It is however a terrible time to rely on traditional publishers for a job. I think that New Zealand authors and writers actually have the best opportunity to get their books “out there” to their audience,¬†because¬†the¬†gatekeepers¬†have gone away. ¬†

Geoff posed the questions “my friend is a first-time novelist…[that] is now ready to be submitted to a publisher. So who should she go to?”¬†

The answer is simple. No one. She should get a cover design for around US$50-US$200, she should  get the book formatted  for print and eBook (under US$200), she should publish via Createspace, Amazon and Smashwords. She should promote her book. If she starts to get traction and is in future approached by a publisher Рshe should be very careful considering, what, if anything, a publisher can do better than she can do herself. 

Sounds far-fetched and outrageous? It has already happened – Hugh Howey indie self-publisher who already makes 5 figures ((US) a month,¬†has recently signed with Simon & Schuster for¬†the print only rights (Howey’s story here).¬†

The future is amazing for writers. The future is amazing for books. But the future is different from the past, thank God. 

Categories
Rants

Fast Kindle Cash – How Sales Letters Deceive

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I get a bit of spam in the Self-Publishing Community I started over on G+. ¬†This one looked¬†familiar¬†though – I’d already seen it before. So before I review Fast Kindle Cash – and point out how much of a scam it is, let’s cut to chase. So you want to:

Rank Your  Book #1 in Amazon?

Here’s the secret three steps:¬†

  1. write a good book; 
  2. include the keywords you want to rank for in the book’s title when you upload it to Amazon¬†
  3. sell some copies or give them away using Kindle Select’s free giveaway days

Really, you say – that easy? Yes: here’s my proof: check “vacation packing tips” or “Kindle NonFiction Formatting – yeah that’s me #1 – wow it was hard though! Not – seriously 3 steps – that’s it. Why does step 1 matter – because I want my books to keep earning me money long-term.¬†

However what I really want to talk about is the anatomy of a scam – because this sales page is really quite clever. The image above is pretty much what you’d see above the fold on most screens. ¬†Do you have the impression that you can produce books just like the one’s pictured¬†¬†in less than a week – you know books like these:¬†

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Windows 8: Out Of The Box #11 for User Interface section of computing at the moment – I suspect it was #1 when it published though be cause it was published by O’Reilly’s – one of the biggest technical book publishers on the planet to coincide with the release of Windows 8

Super Easy Slow Cooker Recipes for Busy Moms – don’t ranking in any category at the moment #170,000 over-all – which is probably less that a book sold every week or so – so I think his claim of a $99,600 royalty may be a little out there. Wonder if this author used the system, but didn’t actually write a decent book – so the book’s sales has now collapsed because of bad reviews?¬†

Act Like a Lady Thin Like A Man #1 in Mate Seeking, #877 overall in the Kindle Store ¬†– I can believe the royalty claimed on this one except of course the author won’t ever see it – this is a traditionally published book by Harper Collins – I wonder if they like having their name associated with Fast Kindle Cash

Know Your Bible – ranking well at #319 over in Kindle store at #2 in Bible/reference – this book is published by¬†Barbour Books¬†which appears to be a small Christian imprint. Again – I wonder if they know they are a shining example to Adrian’s fans – with the implication that they are associated with them in some form? ¬†

So on the above evidence – it seems like one title has collapsed it’s sales, another is on the way done and the other two are doing OK – woops one might say! Oh and some books are seasonal (slow cookers) and some will have a moment of popularity and drop off (e.g. Windows 8 is not new anymore).¬†

Now notice how our copywriter is now a hero he’s found a¬†truly¬†easy way to make money online and decided to share it with you.¬†

Think about that for a moment: he’s found an easy way to make money online, passive income no less and he’s telling the world about it? Like if you found a way to print money – you’d tell everyone else how to do the same? Wouldn’t that devalue the money until it was worthless? Why would he need to even teach you this – because he obviously can already make as much money as he’d ever need.¬†

But hey – maybe he’s just a nice guy… Who uses the juxtaposition of other people’s books to sell his own product while denigrating their¬†intellectual¬†property ¬†(any one can write a book in a week…)¬†

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Okay, so Kindle’s are popular – hmm that was sorta last year, at the moment it seems that more people are actually buying eBooks to read on tablets, iPads and smartphones. But I’m not arguing eBooks are huge. Let’s face it the market didn’t exist to 2007, and the takeup has been phenomenal – we can I think, agree on one thing – there is a demand for eBooks.¬†

I would however, qualify that by saying there is demand for good eBooks. 

fast-kindle-cash-scam-4

Now the other thing that some of you may have noticed – is that Amazon is not the only bookstore selling eBooks – others do too – some you may have heard of: Barnes&Noble, Apple, Kobo. But no, our friend Adrian “KIndle” Duante (no I couldn’t find him when I googled him or looked on Amazon either) doesn’t want to mention any of them – just Amazon. But seriously do you want to tie your books up with just one retailer? Maybe, there are advantages, but there are also¬†disadvantages¬†too – like a lot less crap floating around on the other retailer sites because these types of scam schemes haven’t¬†targeting¬†them, yet.¬†

Most of my books are at the $2.99 price point – they are about 22,000-30,000 words – that’s an awful lot more than 15-20 pages. Which means absolutely nothing on an eReader- but if we say 250 words/page – that’s 3750 words – perhaps I should slap a cover on it and call this blog post a book?¬†

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Now let’s be clear – again these three author’s aren’t anything to do with Fast Kindle Cash – they are just having their name and image associated with it – presumably without prior permission. Both E.L.James and Amanda Hocking are now¬†traditionally¬†published after becoming successful as Indies in the early days e.g. 2009 as far as I know ¬†John Locke is still self-published – and his promotional activities owe nothing to Duante.

Oh and their genres: erotica, vampires and westerns. Yup not a non-fiction book between them (except for a single book by Locke on how he sold a million books (paying for reviews was part of the answer) ). Weren’t we talking about non-fiction books at the start. Oh and I’d lay good money on the fact all of these author’s books took a little longer than a week to write! In fact their success is indisputable – and also utterly irrelevant to the sales pitch at hand.¬†

fast-kindle-cash-scam-6

So now we are actually getting the OFFER – it’s pretty fine print but you may miss that you are signing up for a 39-page PDF – I’m kinda guessing those are small pages and large font, but that’s okay because you will get the video (saying the same thing) and the Powerpoint slides (adding value there!) Oh and checklist – as you can so get lost in 39 pages¬† and cover template – say what I need a cover for my book? Of course full psd templates will only work with Photoshop – you do have that rather expensive bit of software don’t you? But hey a template is cool – will make it so much easier for the guys at Amazon to weed out the “me too” books that will soon be flooding the market for Windows 8, slow cooking, getting a date, and Bible studies. ¬†Bonuses too – that’ like extra value – a Word template to fix your formatting – (you already know why I think Word sucks as a formatting tool so I won’t go into it here) ,and a couple of other random reports which he hasn’t decided on which PLR to use yet for so can’t name. AWESOME.¬†

But wait there’s more …¬†

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I’ll try to keep this shorter than his actual sales page so here goes. Remembering of course that if you sell some copies of your book, mention the keywords in the title and blurb and don’t have a totally offensive cover and start to the book that the reader can preview, you will be on page 1 anyways.¬†

Guaranteed Page #1 Amazon Kindle Rankings

Title: you need to have your main keywords in your title. It’s pretty easy – which bit didn’t you get. No you don’t need anyone to work with you – you just need to do it!¬†

Description SEO:.¬†Having your keywords in your description is handy for your readers but there is no evidence that Amazon’s search algorithms use the description to rank books. Unfortunately Duante restricts himself to only doing an SEO review of the description – if he was offering a copywriting¬†review I’d probably sign up – because, if he wrote this page, he’s a brilliant copywriter.¬†

Description¬†Formatting:¬†Yes you can use HTML for the description. If you actually want a detailed description of how to do this plus some excellent copywriting¬†¬†tips check out Unlimited Books Sales Machine – How To Sell More Books ¬† (it’s got a crap title, the grammar is dodgy,but it’s actually pretty good for basic copywriting¬†¬†tips – and costs $2.99 – probably took him more than a week to write!)¬†

KDP Publishing Setup: ¬†If you exclusively publish your eBook for 90 days with Amazon you can set your book to free. ¬†I speculate that then everyone else who’s signed up for the program downloads each others books. May work, for now, until Amazon gets bored with being gamed …¬†

Amazon Likes: Fiverrr gig  Рyou pay $5 Рthey like your page. 

Tweets: Fiverr gig tweets from people who have no followers (if they are even people not bots) who have no interest in your book. Yeah that will work 

Backlinks: Backlinks have no part in the Amazon ranking of books. Oh and hundreds of backlinks from crappy sites will sink a page, even on Amazon, as fast as Google will catch you. 

Indexing of Backlinks: hasn’t been required since 2008 – no wonder this guy failed at Internet Marketing!¬†

Author Central Optimization:¬†Pen-names are fine – using someone else’s model picture and passing it off as yourself is not. Authorcentral is important – it’s not hard – fill in the fields on authorcentral.com and again on every other authorcentral.¬†

Professional Cover: I agree important Рsuggest that for the price of admission to this service you could get a pretty bloody good cover done! 

 Facebooks likes: see Twitter 

But wait there’s still more …

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Amazon Reviews: Yes important to have a few before you go free Рeven free is a hard sell if there is no feedback. Not that hard to do if you give people a copy of the book, contact reviewers who review books in the field or similar. 

Personal Support: ¬†This is his USP (unique selling point) – he’s your friend, he’ll help you PERSONALLY. It’s possible he may even do so until the money back guarantee has expired. – I mean do the maths – this is a lot of money ¬†because now finally we see the special offer of $297¬†Actually when I went to the site and clicked back off the page the price dropped to $47 – yup prices are truly what the market will pay when there is little to no intrinsic value on offer. Plus there always has to be¬†scarcity¬†– limited time offer..¬†

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Now again copywriting 101 – and a good trick to use in your own book blurbs – think of every objection and answer it, then of course we have that offer again, because usually you have to ask repeatedly to get people to sign up – after all they are still reading – so what do we do now?

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Now this is probably where you’d expect the page to end – but no – what’s he’s done now is sorta told you what he’s offering, but now he needs to go back to selling the dream. Who couldn’t use $5,000/month – I could, you could, let’s face it if you weren’t interested in the money you wouldn’t be reading this ad in the first place! Sell the sexy girl, not the car – oldest trick in the book.¬†

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This is a clever coda. ¬†Yes you can outsource your book for peanuts – and yes it will be generic, bland rubbish. That said you outsource to a decent writer, but frankly if you are just starting out, I’d suggest you don’t pay $500+ to outsource the book, instead¬†write¬†it yourself, learn the business, learn what works, what does not. Writing isn’t a gift, it’s a skill anyone can learn. ¬†

Now if you are worried about this being a “get rich quick scheme” – you’d be totally right. The subtle part is that – if you do self publishing right – then I think it’s an exciting sustainable, fairly passive income business. That’s why I’ve moved into it. I think it’s more stable than trying to fight Google to rank websites. That’s why suggesting that I’m partnering with Amazon¬†is very powerful for Internet Marketers who have had a rough 12 months from Google.¬†

The twist ¬†of course, is that sooner, rather than later, Amazon will have to clean up the crap books. How it will do it I have no idea, but I am also supremely confident that my books will pass whatever tests are applied. Because you see they weren’t written for peanuts and promoted using dubious fake social media and reviews.¬†

fast-kindle-cash-14¬† Notice the juxtaposition of Kindle/Amazon known trusted brands and Adrian who? But he’s giving you a guarantee that’s worth something isn’t it? Yeah right. Under this name there is no such author on Amazon – funny that.¬†

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Urgent ¬†– stop over-analysing¬†it and just ACT NOW okay! Otherwise you’ll end up with an over 2000-word blog post pointing out the¬†copywriting¬†techniques being used.¬†