There is no doubt about it. Self-publishing is a lot of work.
One of the reasons people publish books is to make money. Companies make money from your books, too.
Of course, we all have to pay taxes, but I don’t think we should let companies take more taxes than needed.
Do you? I thought not!
In this article, I will explain the process and reasoning for using CreateSpace to print your self-published book.
Specifically, I will give you some information about CreateSpace and taxation information. I will also explain a few things that you need to know if you are a Canadian, as there are certain laws that Canadians must follow if they become self-published authors.
While the information may not apply to every self-published author in this in world, this article will open your eyes to potential things you may need to do in your country.
Why Use CreateSpace? Answer: Because of “Legal Deposit” (THE LAW!)
After I found out that I need to submit a copy of my newly published book, Risky Issues, to the Library and Archives Canada as part of the Legal Deposit process, I decided to use CreateSpace (an American company) to print my book.
I will readily admit that I didn’t look into any Canadian POD (Print on Demand) companies, since CreateSpace came highly recommended.
To use CreateSpace to print my book, I first needed to create an account, and then upload the book files, which consist of the both the inner and the exterior of the book.
To do this, I had to hire someone to create a file for me to use as the cover, because I’m graphically challenged.
In true indie fashion, Melissa Bowersock suggested I use Brenda, her cover designer. (When Melissa speaks, I listen! She’s been in this biz for about 30 years, and is an award-winning author who has been through it all.)
You Need to Submit E-Files, too!
After speaking with a very nice lady at the Library and Archives Canada, I found out that Canadian authors need to submit ALL FORMATS of their books as part of the Legal Deposit process.
To do this, you need to create an account first.
CreateSpace and Taxation Information
When I attempted to fill out my tax information on CreateSpace, this article about tax information opened. It sets forth information for both US publishers and non-US publishers. Here’s one thing it says about Tax Withholding:
If you provide CreateSpace with your valid tax identity information, tax withholding will not be deducted from your royalties. If the tax identity you provide us does not match IRS records, you may be subject to U.S. tax withholding of up to 30%.
According to the information page for ITINs on the IRS website:
What is an ITIN? An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. It is a nine-digit number that always begins with the number 9 and has a range of 70-88 in the fourth and fifth digit.
Effective April 12, 2011, the range was extended to include 900-70-0000 through 999-88-9999, 900-90-0000 through 999-92-9999 and 900-94-0000 through 999-99-9999.
IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA).
ITINs are issued regardless of immigration status because both resident and nonresident aliens may have a U.S. filing or reporting requirement under the Internal Revenue Code.
Individuals must have a filing requirement and file a valid federal income tax return to receive an ITIN, unless they meet an exception.
Taxation Steps to follow to Use CreateSpace:
Note that the application process may take up to 8 weeks and requires that you submit certain documents to verify your identity.
(For the most recent edition of the form, visit this page of the IRS website.)
If you have trouble, you might need to contact them internationally.
Of course, if you have received a message from Amazon directing you to send them IRS form W-8BEN with an affidavit of unchanged status, please print it, sign it, and send it to CreateSpace, using the address:
c/o AP Tax
PO Box 80683
Tax Treaties and Royalties
Because CreateSpace will also sell your book to others, it’s a company worth using. 🙂
However, to ensure that you will earn the most money from your book, indie authors – regardless of what country they live in – need to be aware that you can earn more if a tax treaty exists between your country and the United States.
I had to find out if a tax treaty existed between Canada and the US. It does.
I then had to find out what it said. Information about royalties can be found in Article XII of With Respect to Taxes on Income and on Capital, in the Convention Between Canada and the United States of America.
I also had to find out if I needed a SSN (Social Security Number), and referred to Social Security Numbers For Noncitizens to find out, which I accessed via the Noncitizens link on the Social Security website.
It was here that I finally found the IRS toll-free number, 1-800-TAXFORM (1-800-829-3676). Here is some other taxation information I found using this link via CreateSpace:
Tax Reporting Your U.S. source income will be reported annually on IRS Form 1042S. The form is issued on, or before, March 15 each year and is an informational statement of your royalties and any amounts withheld during the prior tax year. For example, royalties paid to you from January 1, 2013 through December 31, 2013 will be reported on Form 1042S, issued in March 2014. You may be responsible for paying taxes in your own country.
There has been an update to the tax information interveiw on Amazon. I learned about this from Jo Ann Plante who blogs on Write, Read, Delight, Indeed! and who sent me a link to Tax Withheld on eBook Royalties by Amazon – A Quick Tip Helping International Authors Save. This is a prime example of how wonderful and helpful indie authors are.
David Henderson also made this video for us, which shows how to update your account.
A Final Note
Now that you know about CreateSpace and are equipped with some taxation information, are you going to apply for a reduced tax withholding rate? I sure hope so! Yes, I know firsthand what a pain in the butt all this work is! But one day, it’ll all be worth it…
It is now available in print from CreateSpace, too. 🙂
Author: Lorraine Reguly
Lorraine Reguly, BA/BEd, is an author. She is also an English teacher-turned-freelancer for hire, and offers 4 different services on Wording Well: writing (including blogging and ghostwriting); editing; and mentoring. She also helps others become published authors! Check out her services and see what she can do for you to help you!