So, what is step one on this great adventure? I mean, besides write the book? The great publisher or self publish debate? Agent hunting? Looking for what publisher I want? Dreaming about how to spend the advance?
No on all of those, except the dreaming bit. (Mexico here we come!)
First up: Get a business license. Writers are artists. While writing is all you’re up to, you don’t need a business license. Published, selling authors are business people. They have a product they are trying to sell. Furthermore Authors are not employees. J.K. Rowling is not an employee of Bloomsbury. You will not be an employee of your publisher. Which means you need a business license, and you need to figure out how to organize your company. The days of you get a check, you deposit the check, and then round about April you fill out a basic 1040 are over.
I'm going for a sole proprietorship. I don't have partners, so there's no reason to do a partnership. I'm writing a book, not selling chainsaws, so my liability is already pretty limited. An LLC won't do much for me. Right now the amount of money we're talking about is so small that any sort of corporation isn't worth the effort. All of these things may be different for you, and it's worth your time to figure out what will work best for you. Quick example, if your book is about how horrendously cool it is for young adults to get high and have unprotected sex while driving stolen cars, it's just possible that an LLC might be a good idea.
You might wonder why you need a business license before you've sold the book. The easy answer is this: As a business you can write off your expenses. The paper, ink, envelopes and stamps that'll be used in the Agent hunt, you can write them off. All those manuscript copies, write off. Or, if you go the self publish route, the money you spend to get your book online can be written off.
Why do you want to get write offs? It works like this. If you sell fifty copies of your book, and you make $200.00 at it, you pay taxes on all $200.00 if you don't have any write offs. If you're set up as a business, you can deduct the money you spent on stamps ($25.00) the money you spent on manuscripts ($65.00) and the money you spent on shipping ($12.00). Now you only pay taxes on $98.00 of the $200.00 you made. $200.00 is little enough money without you having to pay taxes on all of it.
So, for me the next step is to go to my local county government and sign up as Elise Hecht, Writer. Come Tuesday I’ll once again have my own business, and this time it’ll be writing.