People often ask if I’m afraid I’ll run out of ideas.
No, that’s not what I fear.
My CPA, who I’ve been with since before I sold my first book, including those seven–or was it eight? possibly nine–years I had no earned income at all, retired last year. We’ll pass over the massive trauma this inflicted on my delicate little psyche and move right on to my finding a new CPA, which I did by asking my friends for recommendations.
I might be his only writer client but my new CPA is a trooper; he had my taxes done well before time and he asked relevant questions that set guideposts for me going forward. He ended by saying, “We need to be thinking about the first quarter 2022 estimated tax payment. Is it reasonable to guess/ estimate your 2022 income will be at least as much as 2021? If so, we could base your 2022 estimated payments on your 2021 tax liability.”
I took a deep breath and let it out slowly. I didn’t want to send the guy screaming for hills. On the other hand, he took a chance on a new client who manifestly doesn’t speak money and I owed him nothing less than the absolute truth. I replied as follows, edited.
Very long read, but so you know what you’re dealing with here:
I never know how much I’ll make in a year.
I get monthly income from my books published independently in e in North America. Right now I’m growing a new series and it doesn’t sell as well as the others yet and won’t until there are more titles. It is my hope that the 2nd book in the series, published in January, will sell more than the first one, and the third one published in November more than that. Although the November book won’t begin to pay out until March 2023.
I also receive royalties biannually from multiple US publishers, covering all editions including print, e, and audio. Most are negligible, the few are what pay the bills, and they can show up at any time of the year.
The last two years my income was ramped up because of two unexpected royalty checks from overseas. No idea if those will continue or in what amounts.
The Kate Shugak series is under option for screenrights again this year, so there is an unanticipated option payment.
Once the option becomes known, this may make my other series look more attractive to other producers. Historically it has also meant a rise in book sales, which may affect all my titles and my income.
The option is against the purchase price, which only kicks in should the series go into production, which has yet to happen to me so I’m not holding my breath. In the remote chance the fairy tale comes true, production companies don’t deduct taxes from options and purchase prices so I’m on the hook for the entire amount.
As you have already seen, some foreign countries require that I pay taxes on those of my books sold by them in those countries. My UK/Commonwealth titles earn the bulk of my overseas royalties, but I’ve also been published in Japan, Germany, Italy, France, and Czechia. There may be others but I can’t remember them at the moment. Royalties from them show up sporadically at best.
All of which is why I am unable to put any kind of number on my income for any given year, and why everytime I get a check I immediately send 20% of it to the US Treasury, no matter if it’s the quarter payment due date or not.
So when you say we should set up quarterly payments for this year based on last year’s income, I’ll say “Sure!” but you should know I’ve already paid into federal taxes for this year. Because I could.
To which my new CPA replied, “It seems your approach may be best to just pay as you go.”
Doesn’t scare easily, the new guy.
So, no, I don’t worry about running out of ideas. The truth is that most of the tension in a writer’s life comes from the business side of it, not the creative side. An unreliable income is the norm. All too often that norm is below minimum wage and was for me, too, for many years.
Not whining here, just stating a fact. I knew what I was getting into when I left a paying job with benefits behind to abandon myself to the wild and wooly west of a writing career. I’m now that rare bird who can live off my writing income. ‘Twas not always thus, and continues not to be for many writers. The Authors Guild has been working on that since 1912.*
According to the US Bureau of Labor Statistics, there are 9.6 million self-employed Americans. If anyone has reliable numbers for how many of us are writers, point me, because I’d love to know.
*The AG’s 2022 Winter/Spring Bulletin has an excellent piece on “the great merging” of publishing houses since 1960, which has had enormous adverse impact on the ability of writers to make a living and has driven a lot of us to publishing independently.
Author and founder of Storyknife.org.