Most authors operate as a sole-proprietorship. It is the default entity until a LLC or S-Corp is formed. You and your writing business are one in the same. Sole-proprietorships are the simplest structure of the three entities.
Do authors pay tax? Freelance income is self-employment income, and so are any royalties you receive for that book you published or self-published.
Today, authorship for most writers is a business, not a profession. While a college degree is not required to become an author, a higher education can help you develop the fundamentals of writing.
Key Steps for Authors
Here are a few pointers to know about book category and keyword research:
- Head to Amazon Books and do several searches with all the words and phrases that describe your book.
- Go through each book and see which categories and keywords they use.
The above is vital when running a self-publishing business because categories and keywords are a part of metadata.
This post outlines the principle business models used by independent authors today, as devised by the Alliance of Independent Authors (ALLi), together with the most popular income streams for self-publishing authors.
The first steps to take when launching a business blog include:
- Defining your target audience
- Setting goals and objectives
- Choosing a blogging platform
- Creating a content strategy
Is an Author a Business?
Authors are business owners. Expect to pay self-employment tax if you make a net profit. Yes, legally an author can use a pen name to publish.
If you’re an indie author, you probably answered yes to being a business owner. LLCs allow authors to set up a separate legal entity, protecting personal assets. Authors are considered self-employed.
Your writing may be a business if you:
- Treat it like a business, expecting profit.
- Actively pursue deals with publishers.
- Keep records of expenses and earnings.
- Marketing, books, publishing packages are deductible expenses.
- List income and expenses on Schedule C, Form 1040.
Understanding business will help you plan for success.
Decide if you will set up an LLC or DBA. Focus on building your brand and planning for long-term success.
An author works from a writer-oriented mindset; a publisher from a reader-oriented one. Take classes on best social media practices.
Pouring money down the drain unless you’re selling lots of books.
Author vs. Entrepreneur
To be an entrepreneur, an author needs to go beyond a finished manuscript to making a book that people want to buy and build the business-structure to take it to readers.
There are "author-authors" and author-entrepreneurs. The author-entrepreneur owns a business tied to their book.
Self-published authors are entrepreneurs. They ask themselves: Is there a big market? How many people want your book?
How much do you need to invest each month? Consider website fees, utilities, subscriptions.
Books extend your platform, showcase expertise, build connections, and create revenue. Know your product first.
An entrepreneur always wants his own business instead of working for others. He takes initiative and tries to achieve goals.
Artists adopt “collaborative bricolage” – working together to make the most of what’s available. It transcends short-term goals.