Friday, June 1, 2007

Don't quit your Day Job - Part III

Continuing with the example in the previous blog let's look at the following:

It's the next tax year and I've received my second half of my advance - $2,500 (or $2125 if I have an agent). I've also received my first royalty statment and while my book is selling I haven't yet earned back my advance from the publisher. So my income for the year in the second quarter is $2,500.

On my second royalty statement I've earned back my advance and earned an additional $1975 in royalties. So my income for the year is $4475. I have expenses of $375 to my agent and $1100 in additional expenses that include travel and attending conferences to promote my book. So, my net income for my Schedule C is $3,000. This amount becomes income on my Form 1040 and if it's my only income then my standard deduction will reduce this to zero but once again I will still owe Self-Employment tax which in this case amounts to $423.89. The calculation is ($3,000 X .9235) = $2770.50 then ($2770.50 X .153) = $423.89. Again, see Schedule SE for more details.

One of the ironies of becoming a published author who is earning royalties is that you, the writer, have to spend some of that royalty money to promote your book so it sells and so your publisher will want to publish even more of your books. There's a saying in the writing/publishing industry - "You're only as good as your sales figures from your last book!"

Bringing this discussion back Close To Home (great title for a book!) I see Todd working very long hours not only promoting his latest book, Novelist's Boot Camp, but also his four works of fiction. In addition to this he is working on another piece of non-ficiton and working a full-time job, AND developing the story line for another piece of fiction - this one a military suspense/mystery, AND working on the plot for a motorycyle mystery series.

The second weekend in June 07 we're off to Duckon (www.duckon.org) and off to Printer's Row (http://www.chicagotribune.com/about/custom/events/printersrow/) both are happening Close To Home (there's that title again!) so we don't have extensive travel for these two gigs - thankfully!

We traveled last weekend for a sister RWA Chapter's retreat - Todd and I are both members of the Windy City RWA Chapter (www.windycityrwa.com). It was an incredible retreat and we had a fabulous time with all the members of the Chesapeake RWA Chapter in a beautifully rustic setting. Todd gave a Novelist's Boot Camp to the group and it was extremely rewarding to see recently published, multi-published and struggling-to-be-published (including me) get something out of the techniques that Todd presents. I attend every boot camp that Todd puts on and while he has a basic set of drills and techniques that he presents based on his book he also tailors the presentations based on the venue and the audience.

I get something out of every boot camp and I as I continue to work on my final (I hope!) edit of my romantic suspense novel I marvel at how much I still have to learn.

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