Erin Ritch

Author, Mom, Founder of No Wyverns Publishing

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Category: Self Publishing

Myth Machine!

If you all haven’t heard of this site yet….well, you’re welcome.

I’ve shared a bit about this in my newsletter, but I’ve been involved in an amazing site called Myth Machine since earlier this year. Readers can go to this site and “read for free” from a selection of books (I have three books up there!) that are posted. You can read these in an e-reader style program that Myth Machine populates, and every other page will have ads (this is how us authors benefit, too!)

Free for you…pays us, too.

I personally love the way this is designed.

But wait…there’s more! They are also building fandoms around our books, in addition to MANY MANY other books, television shows (Charmed!!), movies, etc. These fandoms have a social media feed built into them….so you’re sharing and chatting and connecting with other people who love that fandom as much as you do.

WHEW!

If you are interested, sign up for a free account here.

And then go find me here and let’s be friends!

Don’t forget to join my fandoms for Myth, Memories Wait Alone, and The Quinn Family Adventures. I’ll be sharing more history and other fun stuff surrounding my books in the future. I’ll see ya there!

Port Orford Indie Press Writer’s Conference – 4.21.18

I’m excited to share that I will be presenting at the First Annual Indie Press Writer’s Conference in Port Orford, Oregon on April 21st! I will be focusing my presentation on some of the questions I had when I first began self-publishing. I truly hope the information I share will be valuable and help another author get their work out there!

And it’s at the Oregon coast…can’t get any better than that!

Read more about the conference at WordLink and visit the Port Orford Library’s website here. I am blown away at the wonderful programs offered by this library, I can’t wait to visit next month!

This is me.

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Reading my first review for “Memories Wait Alone” on Amazon.

Read for…free?

Yep, free.*

* = Just means you have to leave a review on Amazon. Otherwise, yep, still free.

Before I started self/independently publishing, I didn’t really understand why authors were pushing so hard for reviews. I mean, I’m hoping if you’re at the point where once you’ve published a book…you’ve had enough feedback on the story, right?

Well, right. But that’s a different kind of review that an author uses (or should use) to craft the best book possible. Right now I’m talking about Amazon reviews, which can be long and hateful or short and sweet. Either way, its evidence that someone read your book. And that helps separate my book from the thousands and thousands of other E-books that have not been read. Which means someone might take a chance and buy that book for .99. Every dollar counts and just allows me to keep doing what I love…writing stories.

I stumbled upon a website called Story Cartel several weeks ago – it seems like a great resource. An author (me) can upload my book (Memories Wait Alone) and they will offer the book as a free download promotion for 3 weeks. Anyone that downloads the book is asked to leave a review on Amazon and in exchange, get entered in drawings for prizes.

So I thought I’d give it a go – if you are interested, check out the link here!

Either way, it’s always cool to see my book on another website. =D

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Well, hello there.

No Wyverns, Only Taxes – Hobby or Business

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Image credit: John Morgan

Since this is my first time posting on There Are No Wyverns in this Story allow me to introduce myself. My name is Nicholas Ritch, if the last name sounds familiar it is because I have the pleasure of being married to the creator of this blog, Erin Ritch.

I work for a tax, accounting and payroll firm in Oregon. I have been thinking about some possible business content for Erin’s fellow self-published authors that follow nowyverns.com for a while now and what better time than a week before tax season to start talking about taxes? One of my favorite business topics! This will be an ongoing series, I’ll cover a variety of topics and if you have a specific topic you have questions about in a future post leave it in the comments, I am happy to get suggestions!

Disclaimer: I am not a writer, my writing is flawed, overly technical and might give you a headache. I tried to make things clear but if you have questions or need clarification, please feel free to comment below and I will respond asap. I apologize in advance, I hope you find it helpful. 🙂

Now on with the show!

 

Is this a business or a hobby?

This is the most important question we need to answer before preparing a tax return for a self-published author.

If your self-publishing activity is a business, you will record your income and expenses on Schedule C, businesses can record losses that reduce your adjusted gross income. Businesses claiming income on schedule C will be subject to self employment tax when there is a profit.

If your self-publishing activity is a hobby, you will record all income on line 21 for miscellaneous income on the front of Form 1040; your expenses will be recorded as miscellaneous itemized deductions on Schedule A line 23. Only expenses above 2% of your adjusted gross income will be counted toward your total itemized deductions and your reported expenses can not exceed your reported income.

Of the two options listed above, having your activity classified as a business is definitely the most straight-forward and the ability to have losses offset other forms of income can be a great asset. But, income from a business is subject to self employment tax (15.3% of business gain, 12.4% is social security tax and 2.9% is medicare tax) in addition to any income tax that may result from adding it to your adjusted gross income.

If self-publishing is a hobby for you the income just gets added to your adjusted gross income, no self-employment tax. While you do get to claim expenses on hobby income on your schedule A itemized deductions, the deduction is limited to the amount of your income. The expense is further limited because only the amount of the expenses that exceed 2% of agi will be added to your itemized deductions. It is possible that your itemized deductions will be less than the standard deduction, in which case the expense doesn’t matter because the standard deduction provides greater tax benefit.

According to IRS Publication 535 there are a number of factors that may determine whether you are participating in a hobby or a business. Here is an excerpt:

Table 1.1

“In determining whether you are carrying on an activity for profit, several factors are taken into account. No one factor alone is decisive. Among the factors to consider are whether:

  • You carry on the activity in a businesslike manner,
  • The time and effort you put into the activity indicate you intend to make it profitable,
  • You depend on the income for your livelihood,
  • Your losses are due to circumstances beyond your control (or are normal in the start­up phase of your type of business),
  • You change your methods of operation in an attempt to improve profitability,
  • You (or your advisors) have the knowledge needed to carry on the activity as a successful business,
  • You were successful in making a profit in similar activities in the past,
  • The activity makes a profit in some years,
  • and You can expect to make a future profit from the appreciation of the assets used in the activity.”

-IRS Publication 535: Business Expenses (2014), page 5

As we can see there are a number of questions you must ask yourself about your writing to make the determination of whether you may treat your writing as a business or a hobby. One of the things the IRS puts the most weight on in the determination of hobby vs business is what it calls “the presumption of profit.” Here is the IRS once again:

Table 1.2

“Presumption of profit.

An activity is presumed carried on for profit if it produced a profit in at least 3 of the last 5 tax years, including the current year. Activities that consist primarily of breeding, training, showing, or racing horses are presumed carried on for profit if they produced a profit in at least 2 of the last 7 tax years, including the current year. The activity must be substantially the same for each year within this period. You have a profit when the gross income from an activity exceeds the deductions.

If a taxpayer dies before the end of the 5­year (or 7­year) period, the “test” period ends on the date of the taxpayer’s death.

If your business or investment activity passes this 3­ (or 2­) years-­of-­profit test, the IRS will presume it is carried on for profit. This means the limits discussed here will not apply. You can take all your business deductions from the activity, even for the years that you have a loss. You can rely on this presumption unless the IRS later shows it to be invalid.”

-IRS Publication 535: Business Expenses (2014), page 5

If your writing can meet this test, according to the IRS you have a “presumption of profit” and therefore you may treat the activity as a business. However, if your business does not meet this test it does not mean that you must immediately consider your writing activities as a hobby.

If you feel your writing business meets a number of the requirements in table 1.1 you may be able to argue that regardless of the years-of-profit test you are running a business. Just make sure you know your position and keep any documentation or proof that supports your claim to be treated as a business in case of a dreaded IRS letter questioning your claims.

The IRS leaves the decision up to the taxpayer, but it is the responsibility of the taxpayer to defend their position if your business losses are called into question because the IRS thinks your business should have been considered a hobby for tax purposes. This is where knowing what kinds of things the IRS uses to determine business vs hobby comes in handy.

Here are some things you can do to help legitimize your self-publishing endeavors as a business:

  • Register your business in your state, to establish your business name – Some places call this a DBA filing or Ficticious Business name. Should be around $50, but costs vary from state to state as do renewal periods.
  • Apply for an Employer ID Number with the IRS – This provides a number of functions but primarily gives you a tax id number for your business. If you are doing something in your business name that requires you to give a tax ID number you can give this EIN so you don’t have to give out your social security number. It is totally free and can be done online here: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online)
  • Get a business bank account – After establishing your business name and attaching the EIN to it you can open a bank account in the name of your business. Having your business name on the account will allow you to deposit checks made out to you in the name of the business. It is also important to keep your business and personal finances separate which is the main function of your business account. It will usually take a minimum $100 deposit to open, but policies vary depending on the institution.
  • Make a business plan – the Small Business Administration has an awesome step by step walk-through for creating a business plan here: https://www.sba.gov/writing-business-plan
  • Double entry accounting software- I highly recommend purchasing some sort of double entry accounting software like quickbooks (it doesn’t have to be quickbooks, but that is just what I use and am familiar with) to keep track of your income and expenses. This type of accounting software will also allow you to generate your main financial statements: the balance sheet, profit & loss, and cash flow statement. To compare intuit accounting products: hobbies use quicken, businesses use quickbooks.

If you decide your self-publishing activity is a hobby that you do for fun, that’s totally okay. Your status as a hobby vs business can always change in the future, when it does you may begin filing your taxes as a business. Arguing hobby vs business does not dictate the validity of your activities, it only dictates how we must proceed with regards to reporting income and expenses for tax purposes.

For more information on this topic I recommend looking at IRS Publication 535. It has not yet been updated to reflect the 2015 taxes we will be doing this tax season but should be shortly. Here is a pdf link to the 2014 pub https://www.irs.gov/pub/irs-pdf/p535.pdf

Disclaimer: The information contained in this post is not intended to be, and should not be, construed as legal, accounting or tax advice to the reader. This post contains my personal opinions and interpretations of the IRS tax code and the laws that govern it. It is also not intended to be specific, directed tax advise.
IRS Circular 230 Notice. This website/blog site is not intended or written by Nicholas Ritch to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

“Memories Wait Alone” promotional materials

I’ve been working hard this week on coming up with a promotional design I can use for my Historical Fiction book Memories Wait Alone. I’ve put this as a top priority as I know I need to allow time for printing/shipping and I’m a standstill until I receive these.

My plan was to use a version of the cover design so a potential customer could locate the book itself (if the promotional materials have done their job and piqued their interest…). After much discussion and several revisions, here’s a look at the final poster design. Instead of a tagline, I went for descriptive words of the main character himself, Cecil Sherbowe. Each word represents an important part of his character. The black and white photo and the word “Aristocrat” sets the time period of the novel. I wanted to put some sort of link to my social media or how to contact me, so my website address is located at the bottom left.
MWA final poster

 

I think bookmarks are a great advertising tool (who doesn’t want to grab a free bookmark!?) but finding a cost effective printer took some research. We finally found a great deal on Overnightprints.com that allowed the order to make sense. I invested in 500 bookmarks but I believe it will be worth it. Here are the front/back designs for the bookmark.

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bookmark side 1 for blog

 

I think its fantastic that these tools are in our hands and – if you do your research – pretty darn affordable. More power to the author!

Judge a book by its cover

 After returning from a fantastic Willamette Writers Conference last weekend, I’ve been reflecting on the Self Publishing workshop I attended. One of the topics was about the importance and impact of cover design for your books. It made me take a critical look at my current books out there…

The cover of “The County Place” (my first self published book) was designed by my husband, Nick. I love it because, due to the title, we get the setting of the book…but the bottom photo gives the reader that initial visual to build off of.

The plot of this book revolves around three sisters, as suggested by the top photo of the statue. I love this because it’s timeless, much like the different dramas the sisters experience that are recurring through many sibling relationships.

I wish I had a picture of the spine of the book, but you’ll just have to take my word on this. There is a small icon of a cat at the bottom of the spine. The family cat plays an important part in the book…it may or may not be the spirit of the sisters’ deceased mother. I guess you’d have to read the book to find out…

The only downside I can see here is this image would be unclear shrunk down to the size of a thumbnail, which is critical for online searches. Also, I should lose “A Novel by…” We’re all grown ups here, I think we get it.

This is my more recent self published book “Memories Wait Alone“. It’s a historical fiction novella about a man who is haunted by the (literal) ghosts of his past. By the time I got to the cover design, I realized I wanted something simple. I became inspired by image searches from the early 1900’s, but couldn’t find anything suitable that was copyright free.

I remembered this picture of my great-grandfather and it was PERFECT. No, the story is not about him….but that haunted look in his eyes does fit with the main character perfectly. So after a bit of Photoshop by yours truly, voila – cover is done.

I’m on the fence about “A Novella by…” I wanted to be clear this was a shorter book (about 50,000 words) whereas The Country Place was over 90,000.  Not as much bang for your buck…but probably not necessary.

And completely unrelated, other than it does show a book cover – here is my adorable daughter “reading” her new favorite book. Have I mentioned my daughter is going to change the world? She’s off to a great start, already.