Thinking About Selling Your Own Books? Think Again.

The #1 reason you should reconsider selling books on your own is: taxes. US tax law is infamously complicated, and if the IRS suspects you of tax evasion they will not hesitate to collect from you to help pay down the national debt.

Until you have an accountant on your publishing success team, leave your book sales to your publisher or distribution company.

Did you know that if you sell print copies of your book through your website that you your state may need you to collect and pay sales tax? 

Even if you drop ship your books by collecting orders on your website and ordering the book from a third-party company that will print and ship the book to the buyer for you, you could still be responsible for collecting and paying sales tax if the buyer lives in the same city as the drop ship company.

Did you know that SC requires authors who sell books-either through their website or in person-to register through the South Carolina Business One Stop (SCBOS) website for a sales tax license?

If you don’t live in SC, you should talk with an accountant or talk with your local Small Business Administration (SBA) office to learn about your state’s laws.

But did you know that if you allow your publisher, POD or book distributor handle all the physical sales so you can focus on collecting royalty checks and only paying income taxes from the 1099 you will receive when you earn $10 or more in royalty during the tax year?

This does not mean that you cannot sell books during live events, but it does mean that you need to know how this action affects your tax responsibilities.

One option is to allow buyers to buy it online using an iPad or other device so that your retailer/distributor will take responsibility for managing sales taxes and you only focus on collected the royalty from the sale and pay only the usual income tax when you file. Your second option is to consult an accountant or your local SBA office to learn what your tax rate is and whether your state requires a sales tax.

You can also sell physical books through your website with the support of tax savvy shopping carts. Your local accountant or SBA office will be able to help point you in the right direction.

I am not an accountant and this information should not be taken as tax advice. It is for informational purpose only. Please speak with your local accountant for more information.

Image Attribution: Matthew G. Bisanz [GFDL (http://www.gnu.org/copyleft/fdl.html), CC-BY-SA-3.0-2.5-2.0-1.0 (http://creativecommons.org/licenses/by-sa/3.0), GPL (http://www.gnu.org/licenses/gpl.html), LGPL (http://www.gnu.org/licenses/lgpl.html), FAL or CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

Danielle Fetherson

Danielle helps aspiring authors become published authors. She believes that everyone has at least one book on the inside of them that can make a positive impact on someone else's life. If you have been thinking about writing a book, learn how to start your book today with the free resources at DanielleFetherson.com.

Comments