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Self-Publishing: Tax Time

This has been a good week for writing. Dragonverse Origins now stands at 74,436 words. If I have another week like this one, the book will be done by next week. Even though this is the first draft, I'm going to send it to my content editor as soon as I'm done so he can tear it apart. I would rather do major editing at this stage than after I made a couple of editing passes. While I wait for his review, I'll be working on a couple of other side projects: I need to update my web page to show my new Galactic Alliance covers; I need to update the first two books in the Dragonverse series; I want to put together a complete linked summary of all my self-publishing posts; and I need to start work on Peacekeeper 3. I think I have enough to keep me busy for quite awhile!

I will be giving a self-publishing presentation at the NorthEast Ohio Romance Writers Of America (NEORWA) meeting next Saturday, February 6th. I'm looking forward to this event. If you live near Parma, please join us. The meeting will be held at the Parma public library starting at 10:00. I begin my presentation around 10:30.

Tax Time
Tax time is upon us and it's time for my annual reminders concerning taxes. If you've been following my advice, you have a great start on filing your taxes. The Amazon 1099's should be going out soon and when they arrive you need to pay particular attention to them. Smashwords tax forms are already available on their website.

So what's so special about the Amazon 1099's? If you have had any overseas sales, you will have to compare the total of all your Amazon 1099's with the total of all the money Amazon actually deposited into your bank account. If you keep good records, this should be easy. If you have sales outside the United States (and you're in the United States) you will discover that the 1099's add up to more than what was actually deposited. The first time this happened to me I thought Amazon had made a mistake. It took a few back and forth emails to sort it out but the difference is caused by the foreign currency conversion fee you are charged.

I used to think this was a problem with how Amazon reported my income. But, after a few more hard to decrypt emails from Amazon, I don't think the problem is entirely their fault. Their overseas units will deposit the money into my bank account but this deposit is in the local currency. My bank (or theirs) will do the conversion. Overall, it amounts to about 3.3% of the deposit. If you carefully read the Amazon contract, you will find a clause that says you will be charged a fee for this conversion. It does not specify what this fee is because Amazon does not control it.

So why is this important? Why not just take the numbers from the 1099's and plug them into the tax form? Because that foreign currency conversion fee is a business expense. Do the math and take the expense. If you are ever audited, just pull out the 1099's and a copy of your end-of-year report and show them the difference. You will never see this value reported to you from Amazon nor from the bank. You must calculate it on your own.

There are a whole list of other expenses you can claim as well as long as you are treating your writing as a business. These include but are not limited to:

  • Writing supplies (computers, pens, pencils, paper, ink, printers, etc.).
  • Writing related magazine subscriptions.
  • Cost of ordering books.
  • A percentage of your internet cost if you share it with the rest of your home.
  • Meals while you are away from you home office.
  • Mileage that is associated with your writing business.
  • Professional organization membership fees.
  • Travel expenses to conventions and other writing-related activities.
  • Office furniture.
  • Fees paid to editors, artists, and other individuals for writing-related services.
  • Advertizing expenses.
  • Cost of printing business cards.
Some of the above will only apply if you have a home office. This is an area specifically set aside and used exclusively for writing. It does not have to be a single room -- it can be a part of a room. It can even be a small building outside your home (but be careful, there are special things the IRS will need concerning such an office). You can track your household expenses and deduct the percentage of the size of your office from those expenses or you can use a standard deduction calculation based on the size of the office. It's much easier for me to use the standard deduction calculation.

Mileage can be claimed if you have a home office. If you don't have one, then the IRS will most likely disallow mileage because a writer can write from anywhere. If you own more than two cars and you use both for writing activities, you're going to have to treat both cars as if they are one. The tax forms only have room for a single vehicle. I have two and I use them both. I combine the mileage from both vehicles and pretend as if they are from a single car. You can also use this method if you sell a car and buy another one. Just make sure you have a detailed mileage log for each vehicle and you track the total mileage driven over the year for every vehicle.

Many people have an accountant who does their taxes at the end of the year. The fee for this is a business expense. If you have someone else do your taxes, make sure you examine the final product very closely. I've found errors on ones I've had done and had to go back and correct them. I find that it's much easier for me to do my own taxes because I know what needs to go into the calculations.

If you have any questions about what can and cannot be deducted, go to the IRS website and read the following IRS documents. They're actually not that hard to understand if you carefully read them.
  • Publication 587: Business use of your home.
  • Publication 550: Investment Income and Expenses
  • Publication 535: Business expenses
  • Publication 583: Starting a business and keeping records
I know you would rather spend your time writing, but if you want to survive an IRS audit, please make sure you know what is going on with your taxes. Handing your records over to someone else and trusting them to do it all correctly can be a costly mistake. It's your money, it's your business -- make sure you make it your responsibility to at least understand what every line on the tax form means.

Next week I'll talk about how my presentation went at the NEORWOA meeting as well as some things I've heard about concerning the publishing industry.


Self-Publishing: Sharing

I am still collecting funds to help Launch Pad. You can donate by clicking here. This workshop is an experience that will stay with you for the rest of your life. I have been supporting it since going to my first workshop in 2012. It was recently featured on IO9, and has appeared in many other magazines including Locus. Even a small donation will help.

Good progress has been made on Dragonverse Origins. The word count now stands at 69,643 and the end of the first draft is in sight. The Dragonverse series is not my top seller but I do enjoy writing about dragons. As soon as the book goes to my content editor for checking, I'm going to start work on another Peacekeeper. One of the main characters in that spin-off from the Galactic Alliance series is a member of a species that looks very much like a wingless dragon. It's sort of a theme in virtually all of my books. Obsessed with dragons? You bet!

Last week, I was out of town taking a class on how to use a powerful product called Qlikview. The company I work for has had a license for quite some time but not many applications have been developed to use it. I think that's changing. One of the really cool things about the product is the ability to download it and use it's full power for free. I plan on using it to analyze my Amazon sales. Being out of town also gave me a lot of time to write which is how I managed to make such good progress on Origins.

One of the challenges of analyzing Amazon sales data is actually getting the data into a database so it can be analyzed. Amazon does supply a detailed report in the form of an Excel spreadsheet for every month of sales. But the data is not in a format that can be directly imported into a database such as Microsoft Access. I'm working on a computer program (written in VBA) that can scan the spreadsheet and load the relevant information into Microsoft Access. From there, I can load it into Qlikview and generate all sorts of interesting analysis. If anyone is interested in getting their hands on the code or the actual database when it's done, please let me know. I would be happy to share.

I enjoy sharing my self-publishing experience with others. That's one of the reasons I started this blog. The sharing of information is the engine that has pushed our civilization forward. Last year, I was invited to speak at a future Northeast Ohio Romance Writers of America meeting. My first question was what the heck does a science fiction and fantasy writer know that can help a romance writer? After a few rounds of emails, the answer was -- plenty! I presented a list of possible subjects, the list was presented to the members, and a selection was made. I will be at their next meeting on February 6th. If you click on the above link, you will see me listed on the right. I will be sharing my knowledge on self-publishing.

The first half of what I plan on talking about is not about marketing. In my opinion, marketing is too expensive for most self-published authors and the return on investment is not great enough to be considered useful. I plan on talking about how to present yourself in a professional manner. Doing so will go a long way towards helping you on the path to success.

I'm not getting paid for doing this (they are buying me lunch though) and one would think that making an hour-long trip to talk to a bunch of romance writers is not good business sense. But that would be wrong. I'm sharing what I've learned with other writers and helping them improve their final product. It's also a chance for me to meet with writers who live in another genre and perhaps learn something from them.

There was a time when the term 'self-published' was associated with trashy, poorly edited, grammatical nightmares that were dumped on Amazon by amateurs in the hope of becoming rich. That's slowly changing and I hope to be part of that change. A self-published novel should go through the same steps as a traditionally published novel. Granted, the results will not be perfect, but I've read traditionally published works with plenty of mistakes in them.

There's been some complaining floating around on some of the social media from other authors about not being paid to make an appearance. The vast majority of writers don't earn enough to make a living at writing. The rising complaints I've encountered deal mostly with being invited to a conference or a convention and then being asked to pay your own way, buy a conference ticket, and pay for the hotel. In my mind, this is a valid complaint. If you're a writer and you were planning on attending the conference anyway, then I wouldn't complain. If you were not, I would refuse unless you received compensation for your appearance. That's good business practice.

On the other hand, I've read some statements from authors who believe their local library should pay for them to appear. If the library is local, you should be supporting it, not asking them to pay you to walk in their doors. Even if you've made it to the big time and you make enough to quit your day job, you should be willing to support your local library by accepting an invitation to talk to the patrons without asking for money. Doing so indicates you've fallen victim to what I think is the biggest problem in this country -- Greed.

Yes, a writer should be paid for their work. Yes, a writer should be compensated if they are asked to travel more than an hour or two from their home. But asking to be paid to speak to a classroom full of kids at the local high school, making an appearance at a library, or giving a talk at a nearby coffee shop, is being greedy and inconsiderate. I'm not a very opinionated person -- my most commonly used phrase is: "I don't care". But, when it comes to dealing with greed, you will find I am VERY opinionated. It's a cancer that seems to have infected most of America.

I will always accept an invitation to appear at any local establishment without asking to be compensated in any way. I like to share what I've learned over the years as a self-published author. Granted, I'm not the most successful author out there, but I've learned plenty over the years and I won't keep it to myself.

Two posts ago, I said I would begin my round of tax-tips for writers. I plan to start that next week unless another, even more important topic, surfaces.

Time to get back to writing.


Self-Publishing: 2015 Year in Review

I've been making very slow progress working my way through Dragonver Origins. I have not yet reached the point of adding additional material because I've been doing some major rewriting of what I wrote before I started on my project to professionalize all of my books. It took several months to finish reworking the Galactic Alliance series and while Origins sat idle I was thinking about what I had written. Changes were needed and I decided to start from the beginning and edit what I had written. This is not how a book is supposed to be written but there are times when the rules need to be broken. I've added at least 3,000 words so far and some of the rewrites have taken a considerable amount of patience. Finding the right way to word something to get across a concept is not always an easy thing to do.

I will be out of town for a few days living in a hotel and that will give me plenty of time to write. I hope to make significant progress on Dragonverse Origins in the next few days. While the book is being looked at by my content editor, I will be starting work on a new Peacekeeper novel. I've never done two projects at once but that's the plan. While Origins is being reviewed by my content editor, gone over by my wife to fix my dumb mistakes, and then looked at by another fan in Germany, I will be working on a new Peacekeeper. It's going to be a busy year.

I'm following up on a promise I made over a year ago to continue to post my writing income on this blog. Writers don't know if they are doing well or doing poorly unless they share their writing income with each other. This time, I will also share with you the number of books that have been sold.

Year     Income          Books sold
====     =====          ========
2009          $66                     58           This is the year I published my first book
2010        $302                   342
2011      $2,929               3,577
2012    $92,772             46,379
2013      $9,753               3,879
2014      $8,528               1,360
2015      $3,804                  457

Looking at the above information, you should be wondering what the heck happened in 2012? The answer is -- Amazon. One of my books was featured in an Amazon daily deal or recommendation or something (which one I'm unaware of) and sales took off. I could literally sit at my computer and watch the book move up in the ranks. This is the power of advertising. The question is, can it be duplicated? Advertising is expensive and unless it reaches a wide audience with the right interest it's not going to give you a good return on your investment. The advertising I received in 2012 was free and it targeted the perfect audience. I doubt I could have done better with any type of paid advertising campaign.

Ignoring 2012, do I think I'm doing good? I would consider 2013 and 2014 to be good years for a self-published author. 2015 was a not so good year. I've heard it said that the best way to boost sales is to write the next book. I did not release a new book in 2015. I also raised my prices (based on feedback from a number of people). That is a deadly combination! Late in 2015, I lowered my prices and sales seem to have picked up again. I'll let you know how that works out as more data comes in. I'm also pushing to release at least one and maybe two books this year. Sales should increase.

I've also moved my books out of Smashwords and made them exclusively Amazon products allowing me to join the KDP movement. This, I believe has also increased sales. But, with all these changes, how is someone to know if a price change or a book release has an affect on sales? The answer lies in analytics. I'm a computer programmer and I will be going to school next week to learn how to build complex analytics using a product called QlikView. Our company uses it. QlikView has a free version you can play around with at home. I plan on trying to use it to analyze my Amazon sales. If that product does not work, I will write my own program.

Amazon does a great job of providing you with a ton of information in the form of a detailed spreadsheet. All you need is the right software to analyze the data. One of my goes for 2016 is to develop a useful writer's tool that incorporates everything a writer needs to manage their business. That includes performing analytics on Amazon's data. Good data analysis is a must when you're trying to make a business decision.

2015 in review
Last year was both good and not so good to me as far as being a self-published author. On March 31, I received an email stating I had been accepted into SFWA. This was a big milestone for me. I attended Launch Pad in the first week of June. As usual, I had a wonderful time and met another fine group of people. In mid-July, my wife and I took a trip to South Caroline to visit my dad. Two weeks after getting back from that trip, I drove to Washington D.C. to attend the week-long Schrodinger Sessions.

On August 18th, I left to attend my first ever World Science Fiction Convention (Sasquan) in Spokane Washington. It was also my first experience of sitting on a panel. I was very nervous! I'm not a well-known writer, I'm self-published, and I was sitting on panels with traditionally published authors who are well-known. All-in-all, I believe I did well. One panel in particular, however, bothered me for a long time afterwards because I was definitely out of my league. But, I came away from that conference with a very different view of who I should be as a writer.

A few days after returning from WorldCon, I started on my re-editing and reformatting project (professionalization). I realized this was going to delay the release of Dragonverse Origins and would most likely hurt my sales this year. But, in the long run, it will be worth it. The Galactic Alliance series has been professionalized and the results are easy to see. The books look great on the shelf providing a consistent look for the entire series. If you open them up, they look professional on the inside, formatted properly and all of them presenting a consistent look. The Kindle versions are also newly formatted and edited and look just as good.

I also changed how I blog. Instead of rambling on and writing about writing in general, I focused my posts on self-publishing issues. Readership has slowly gone up. A friend of mine recently posted that it took him many years of focused blogging to achieve a high readership. This is my goal and I don't expect it to happen over night.

From a business perspective, I will end the year with a loss. The cost of the WorldCon trip as well as my continuing support of Launch Pad, exceeded my writing income last year. I took a hit in sales because I raised my prices and I did not release a new book. My new dedication to producing a professional product, a heightened involvement in SFWA, and the release of one and perhaps two new books this year will help improve the business side of my writing. I'm also not going to any conferences (including this year's WorldCon in Kansas City) unless sales are high enough to support it. That's sound business.

All-in-all, I would say 2015 was a year of learning for me. I hope to share this information with other writers who are just entering the self-publishing field so they do not make the same mistakes. If you're reading this and you know of anyone who is thinking of self-publishing, please have them read my past blog posts (especially the recent ones) and if they have any questions, ask them to write me.

As always, if you have any questions or comments, please feel free to write to me. I will always get back to you. I do stay busy and if I tell you in an email that I'm going to do something and I fail to do it, please remind me! I don't mind being reminded. If there's a topic you want me to write about, I want to hear about it. If there's a storyline you want to see in one of my books, please make the suggestion. The next Peacekeeper will incorporate at least 2 suggestions from my readers. I appreciate hearing from you. If you just want to say hi - well, that's okay too.

Have a great 2016!


Launch Pad Fundraiser

I’ve started a fundraiser on GoFundMe for Launch Pad. For those of you who've been reading my blog on a regular basis, you know I’m a very big supporter of Launch Pad. It has been, without a doubt, one of the best things I’ve attended to help me establish a network of author friends. Launch Pad relies on funding from external organizations such as SFWA and – in the past – NSF and NASA. These funds are becoming more difficult to obtain and I can see a day in the future when Launch Pad will not be able to continue its mission of educating writers, editors, and other media-centric people in the area of astronomy and science. If you have $10.00, $20.00, or more to spare, please consider donating to help support them. Please, help get the word out as well -- post this on your Facebook, on Google+, Twitter, and anywhere else you believe will help. In advance - Thank you!

I managed to avert an expensive disaster last week. My wife's nephew was over for a visit and he likes to drink a lot of milk. I had separated the screen from the keyboard of my Surface Book and set the keyboard down between our two couches. When the nephew left, he put his almost empty glass on the stand -- also between the two couches. About 30 minutes later, my wife bent over to get something out of her purse (also between the couches) and she knocked the glass over. I heard cussing and yelling and when I looked all I saw was my keyboard covered in milk.

There are quite a number of electronics as well as a large battery in the keyboard section and it is also where the charger connects. I grabbed the keyboard, ran it under water for 10 seconds, and turned it on edge. Milky-white water ran from the cooling ports. I flung it around to get as much water out of it as possible and then ran to the bathroom. I fired up the hair dryer and started blowing through the keys as well as every port I could find. That's when I noticed that the cooling fan in the keyboard was running -- I didn't know it had one! The detach light was also lit.

I will shorten this story by saying that I did attach the keyboard and screen and then found I could not detach them because the screen thought it was detached. I also discovered that the charger was not charging either section. I set the entire unit on a heating pad and let it sit all night. Around 0130, I got up and found the computer charging and I could detach the screen. It's been working fine ever since.

I don't recommend running the Surface Book keyboard under water but I thought leaving the milk in there to dry would have been a worse mistake. I was lucky and I'm not about to let that happen again.

I've been doing some editing and revising of Dragonverse Origins as I work my way through the chapters I’ve already written. I am almost to the point of adding new material. I’m hoping to have the first draft of this book finished in another couple of months. I’ll let it sit for a while I work on finishing/editing two short stories and then I'll begin the chore of digging in and editing the manuscript. I really want to get this book done and published by the end of summer so I can begin work on the next Peacekeeper.

Speaking of Peacekeeper, I requested and received new artwork for Peacekeeper 2. I added the wording and uploaded it to Createspace. I passed the artwork around at yesterday's writer's group and everyone loved it. I'll put a picture of it at the end of this post.

I still don't have a solid story yet for the next Peacekeeper. I have some ideas though. A fan requested that I delve more into the Omel and several others have asked for another similar to PK2. I'm not going to start writing though until I have a firm idea of where the story will be taking us. I'll let you know.

Tax season is coming up and next week I will start my short series on reminders for taxes as a self-published author. If you have any specific requests, please let me know. I've sort of run out of topics for self-publishing, so if you have any ideas there, drop me an email. I should also be able to post my annual writer's income documenting how many books I've sold as well as how well I've been doing financially as a self-published author. There are several other writers who do this and I believe it is important that more do so in the future. 

As always, I enjoy hearing from you, please feel free to write me.


Self-Publishing: Libraries

Because I let Dragonverse Origins sit for so long while I was reformatting and re-editing the books of the Galactic Alliance series, I've had to go back and re-read what I've written so far. As with almost any story that you let sit long enough, I've come up with a few changes. I've been making these changes as I read through the manuscript and so far I've added over 2,000 words. The word-count (if you're a numbers person) sits at 61,850. I'm about 75% of the way through what I've already written and then I will begin adding new material. I like to have a target of 85,000 words which puts me at about 73%. I have a feeling this book is going to exceed that target but I have no way of knowing until I write "The End".

My recent focus on self-publishing in this blog has paid off. People have noticed and I've been getting questions from other authors (one of them is an award-winning author) about certain aspects of the self-publishing process. It's a great feeling to know that I'm helping out other writers.

I celebrated my 58th birthday yesterday. Although I have no plans on retiring from my current job, the fact that I'm another year older did cause me to wonder if my retirement plans are solid. Using a couple of online calculators, I ran the numbers, inputting values that were very conservative. I really enjoy my job and I will most likely work until I'm 70. The numbers I used though assumed I retire at 65. Even with the conservative estimates, both calculators show I will be fine for many years. I did not include my writing income in these calculations because one never knows what will happen. I could be selling hundreds each month or nothing. So, that part of my retirement income came out of the equation. It's a relief to know that my future is secure. Now I can go back to writing without having to worry about the future.

A friend of my dad and a regular reader of this blog suggested I talk about libraries and how they can be used to support a self-published author. I've been meaning to make contact with our local libraries and this gave me a push to get moving on this. My results have been mixed as you will soon see.

My dad's friend told me about an article that appeared in "American Libraries". I did a quick internet search and found it. If you're interested in reaching out to your local library, you should read this article as a starting point for your research: Solving the Self-Publishing Puzzle.

Libraries have a review process before putting a book into their collection. If you have one or more books you would like to donate to the library, you should learn about their review process and who specifically to send your manuscript to for review. A large number of libraries are building huge collections of ebooks. They don't take up any shelf space and are much easier to deal with than printed books. For many self-published authors, donating an ebook might be the only option.

You will see in the article that Smashwords is mentioned. This company has established relations with several outlets that can be used by libraries to obtain books to add to their collection. This might affect your decision to refrain from using Smashwords so you can be a part of the KDP Select crowd on Amazon. It's not an easy decision to make and, as with all business decisions, should be done after careful consideration.

You can also donate printed books. If you use Createspace to produce your book, you might have a difficult time getting your book into a library if you use the Createspace-supplied ISBN. Purchasing an ISBN is not cheap though. Using another print provider such as Ingram Spark is a good alternative. Read the contract carefully and make sure you will be getting an ISBN that can be used by libraries.

I have not yet been able to find the time to make a physical trip to any of our local libraries. There are quite a large number of them within a short hour's driving distance from my house. One of them is literally around the corner. Two years ago, I did walk into the library and I spoke with one of the clerks about setting up a local author section. She did not think the library would do such a thing but she did take my card and said she would give it to the library's administrator. I never received a call back from them.

I have sent emails out to several local libraries. I received a reply back from one of them. That library is far more involved in the community and they host an event called "Cooks and Books". Local authors can set up at a table provided by the library and sell their books or just talk to people as they come in to sample the food that local bakeries and cooks bring in for the event. The library must keep very good records because I was reminded that I had attended this event years ago when I was just getting into self-publishing. Now that I'm more established, I will be attending this event every year.

That same library is also putting on a self-publishing panel. As part of the email conversation I had with them, I was invited to sit on the panel. This is a very different response than the one I received from the library literally around the corner from my house. That particular library has not responded to my inquiry. I do plan on making a physical attempt once again, but I'm not getting my hopes up.

There are other libraries around and I will be making contact with them as well to see how they support their local authors. I will let you know how this process goes.

Using a library to help get your name out there is a wonderful idea as long as the library is also committed to the process. Some seem to not care and rely on a central library to send them books to put on their shelves. In my opinion, libraries that are part of a bureaucracy might be so bogged down in a process set in stone long ago that they have no ability to do anything other than what a central authority tells them to do. As more and more people jump into self-publishing, I'm hoping this changes.

A good, strong library can help a community discover their local authors. Even though sales through such channels will be low, it's fun and exciting to get involved and interact with your neighbors. If you can find a local library that supports local authors, especially self-published authors, get involved -- make yourself known to them -- learn about what they are doing -- and participate.