Think Outside the W-2: Authors and Estimated Taxes**

April showers bring May flowers, but June brings a visit from the tax man.

In light of that, I'm taking a break from the series on publishing contracts this week to talk a little about authors and estimated taxes.

Most people in the United States work as employees of someone else. This is true of writers also – many of us do not write full time, and have other employment that helps to pay the bills. Those of us who work as independent contractors or business owners -- aka, the "self-employed" -- already understand the importance of June 15.

For those who work as employees, however, a writing career means it’s time to think outside the W-2.

U.S. residents (and persons living abroad who pay U.S. taxes) who earn income from writing or publishing will not receive a W-2 from the publisher, agent, or independent site (such as Amazon or Smashwords) which sells their works. Instead, authors receive Form 1099 – "a report of income other than wages, salaries or tips."

(Quit rolling your eyes. This won't descend into alphabet soup. I promise.)

People who receive a Form 1099 are self-employed or independent contractors- and those kinds of people must pay quarterly estimated taxes to the IRS. Four times a year, in April, June, September and December, authors and other self-employed professionals must estimate taxes due on income earned during the previous quarter and send those estimated taxes to the IRS and the state tax authority in the author's state of residence (assuming that state has an individual income tax – some don’t).

If you fail to pay estimated taxes on time, or fail to pay enough, the IRS and/or the state will assess a monetary penalty against you.

Estimated taxes often come as a shock to authors familiar with the employee system, where the employer withholds taxes from every paycheck. Don’t incur fines because you didn't know better.

As soon as you sign a publishing contract or self-publish your first manuscript, it's time to get prepared:

1. Get the necessary forms and mark your calendar to make sure you make your payments before the deadlines.
2. Set aside a portion of every royalty check or distribution to cover your tax obligations – don’t anticipate having enough "left over" from then-current income when taxes come due.
3. Don’t forget to document your deductions! Authors can often deduct certain costs, expenditures and expenses associated with writing and publication. Consult a tax advisor to learn more, and don’t forget to save receipts to document your deductions properly.

Paying taxes is never fun, but planning ahead, setting money aside as you earn it, and learning enough about taxes to plan your business wisely can help take at least some of the sting from the ides of April, June, September and December.

**I’m not a tax advisor, and this post should not be taken as tax advice. Consult a qualified accountant or other tax advisor before making decisions on tax issues.

Susan Spann is a California publishing attorney and the author of Claws of the Cat (Minotaur Books, July 16, 2013), the first novel in the Shinobi Mystery series featuring ninja detective Hiro Hattori. You can find her on twitter @SusanSpann  

Bram Stoker Award Nominee Peter Wacks

You hear a lot about platform as a writer. It’s not enough to pen a good book. You also have to figure out a way to help market it. “Build a platform,” they say. “Establish your brand.”


Not only does Peter Wacks throw down some snazzy lines as an author, but he’s got the platform thing down. We can all learn something from this Bram Stoker Award Nominee. Yes, you read that right. The Horror Writer’s Association trophy is highly coveted and Peter is on the short list along with his co-author Guy Anthony De Marco for their graphic novel Behind These Eyes. Peter is also the creator of Cyberpunk CCG, a card game based on the Cyberpunk 2020 world created by R.Talsorian Games. Two children’s books brighten his resume: The Little Airship That Thought It Could and A Steampunk Journey. Then there are his novels, The Second Paradigm, a time travel Science Fiction work, ingenuitive enough that he was a guest speaker at Mensa, and Howl, a vampire and werewolf dark comedy.

So you see…games, novels, children’s books, graphic novels—here’s a Leonardo daVinci of diversification.

CIR: Welcome to the Rock, Peter! Are you stoked about the Bram Stoker award possibility (I couldn’t resist)? Our RMFW pal NYT bestselling author Jeanne Stein says “Behind These Eyes has it all: great creepy story, world class graphics, ending that will leave you gasping….”

PW: First a quick thanks to the Rock for having us on the Blog, as well as to Jeanne, we appreciate the review and are stoked (mhm, me too) that she enjoyed it. The nomination for the Stoker was kind of a jaw drop moment. Guy and I were both very appreciative of the support and compliments of the great folks in the HWA that have been encouraging us. The possibility of winning the award isn’t something we’ve really talked about; we’re more focused on the next project, a graphic novel with the working title Shotgun Wedding.

CIR: Behind These Eyes is a play on the evil that lurks in all of our hearts and it’s compared to Lovecraft works. Care to expound on the inner demons thesis?

PW: To me, horror is all about the inner demon - in the reader. While gore and viscera get a knee jerk reaction (at least from me they do) they pale next to an evil that the reader can identify with. The writing of Behind These Eyes was tightly focused on portraying an inner evil covered with a sympathetic good. As we scripted the Graphic Novel we created every setting and situation as an echo of real fears and horrors. Losing things we could love. Protecting our home. Losing control of our lives. All of these are parts of the inner demon, letting the reader glimpse the horror that exists behind everyone’s eyes.

I won’t spoil the ending, but I will say this – for all the darkness we wrote into Behind These Eyes I am a firm believer in facing your inner Demons.

CIR: Now I’d like to pick your brain about multi platforms. I would think that inquiring minds and authors who are zapped from just trying to kick out a manuscript would ask: How do you find the time?

PW: I realized long ago that I could be a writer or I could get sleep and have healthy relationships. I made my choice, best not to waste it, right? On a more serious note, I set alarms. We all know rule one, which is finish the darned manuscript. For me, rules two and three are write for eight hours a day and work on each project every day. So, four projects means 2 hours each, seven days a week. Every break is set as an alarm on my phone.

Kevin J. Anderson gives a great speech about 11 tips to productivity. One of those tips is knowing when to stop. By creating a structure that works for me and defining my times, especially when to stop on each project, I am less likely to get distracted by FaceBook and more likely to get my projects done. Find the method that works for you, and be relentless about finding the time to write everything you want to write. None of us got anywhere by not writing, after all.

CIR: I must confess that I don’t know much about card games. Is Cyberpunk CCG like a role playing challenge? Are you working on new games?

PW: A CCG is, in a way, a roleplaying story which is competitively played using cards. Cyberpunk CCG was a fun project, as there was an overall story arc which influenced each new set of cards, and those story arcs were determined by the tournaments. Getting to write (and design) something that fluid was amazing.

I am currently working on Interface Zero, a Savage Worlds (Pinnacle Entertainment Group) setting published by Gun Metal Games. It is a fun mash-up Cyberpunk, Cypherpunk, and military sci-fi. I am writing the novelization of the trigger event for their second edition, as well as assisting with chapters in the core book and a few supplemental sourcebooks and adventures.

I do also have three games of my own design on the drawing board, but they aren’t a high priority and I don’t have them on the calendar to shop around till 2015.

CIR: Is there any advice you’d like to offer about multi platform development to writers such as myself who are tunnel-visioned on only their manuscripts?

PW: Wow. Um. Yes. Tons of coffee and very supportive friends to start. Really though, it is daunting. So was your first novel. If you really want to pursue being able to handle multiple projects you need to learn the job, just like you did for your first book. Set time tables that are realistic. Practice. If you know you can write a short story in a week, try writing two simultaneously in 14 days. Then do it again… and again. As you develop speed and can handle two projects faster together than apart, start slowly increasing the size of the projects. You get it – practice makes perfect. Once you are proficient in working on multiple stories – then you can branch out to multiple platforms using the same methodology.

CIR: What panels will you be on at Comic Con?

PW: You know, I would love to tell you, but the great folks over at DCC are working hard on finalizing the Author Track panels, so I can’t say for sure yet. I know I’ll be doing six or less panels there (maybe as few as three) as I requested a light panel load and they were talking about having me on panels in three separate tracks (authors, comics, games.) I do know that when I’m not on panels folks can find me at my fan table or at the table I’m sharing in artist alley. Look forward to seeing you all there!

CIR: Thanks, Peter!

Interview conducted by Gusto Dave

RMFW's Seventh Book Banner!

We continue to think it great fun to feature book covers from RMFW members in a banner.  So much talent and such an astonishing number of fabulous books to choose from!

Here's our seventh banner!

Now for some closeup shots.

As always, I'm ready to fire up the Kindle or head into the bookstore.  How about you?

Have you found RMFW on Facebook?  If not, here's the link. And if you haven't yet joined RMFW, here's that link!

Janet Fogg

Janet is the author of Soliloquy, an award-winning historical romance, and co-author of the military history best seller, Fogg in the Cockpit.

Out of Sight, Out of Mind ... Out of Print?

“Out of print” status is important to authors (and publishers) because a publishing contracts should terminate - or at least allow the author termination rights (along with reversion of rights granted to the publisher in the contract) - when the Work goes “out of print” or within a stated time thereafter. Many contracts allow the publisher a stated time to return the work to "in print" status before the author can terminate, but even that clause doesn't trigger until the work is out of print.

For obvious reasons, it's important for authors to make sure all publishing contracts contain clear, unambiguous language describing when the work is "out of print." And remember: the popularity and prevalence of e-books means the contract should require more than "availability in any form and format" or you could be stuck with a work that's still "in print" even though it's only available in .pdf e-book form through the publisher's website.

When reviewing an “out of print” termination provision, the author should look for three important details:

1. How the contract defines “out of print.” If the contract merely states that the work remains in print until “no longer offered for sale” or “not offered for sale for X consecutive months,” the author may find herself trapped in perpetuity.

The contract should define “out of print” with reference to royalty-bearing sales, not "availability for sale" or amount of stock in the publisher's warehouse. Note: that's "royalty-bearing" sales - which generally doesn't include cheap sales at deep discount or copies distributed for review and promotional purposes.

Tying out of print status to "availability for sale" means the book will remain in print forever if the publisher offers the e-book version for sale through the publisher’s own website. Back in the days of print-only contracts, publishers could define “out of print” by reference to availability because sales depended upon the production of printed books. When the books all sold, the work went out of print unless the publisher opted for another print run. Now that publishing contracts include ebook rights, “out of print” status must be much more carefully defined.

2. Automatic termination vs. Notice and Revival. Does the contract automatically terminate when the work goes out of print, or does the contract contain a “notice and revival” provision requiring the author to notify the publisher of his or her intent to terminate after the work goes out of print (and then give the publisher time to produce another print run or return the book to “in print” status in order to avoid termination)?

Most publishing contracts contain a notice and revival provision, and from the publisher’s view, this makes sense. Publishers invest time and money in preparing and distributing works (and that’s without considering marketing efforts). Reasonable pre-termination notice makes business sense, and it does make sense for the author too – as long as the length of the notice period, and the publisher's time to cure, are reasonable and related to royalty bearing sales.

Unilateral author termination rights on "out of print" status have clear advantages for the author. Under this scenario, the contract states that if the work ever goes out of print, the author can terminate the contract immediately (or on some stated period, usually 60-90 days) upon written notice to the publisher. This kind of termination right is more rare than notice and right to cure, but it's something for the author and the publisher to discuss.

3. Non-ambiguous statement of rights reversion. It isn’t enough for the contract to state that the agreement terminates (or can be terminated) when the work goes out of print. The contract must also include a non-ambiguous statement of rights reversion providing that all rights granted to the publisher automatically revert to the author upon expiration or termination of the contract for any reason, including without limitation termination for out of print status. Rights reversion should not require (or worse, be tied to) a written release of rights from the publisher. Reversion should be automatic and immediate upon contract termination.

Without a clear statement of rights reversion, rights to the work could remain in limbo – or worse, remain with the publisher, even though the contract has ended and the work has gone out of print.

Read your contracts carefully, and make certain you know what the out of print language means. Don’t settle for “best guesses.” If you have any questions, get a professional opinion – even if that means paying for a specialist’s advice.

Once you sign, the contract controls your legal rights and obligations. Authors who take the time to ensure clear, acceptable and unambiguous terms up front, have a far better chance of successful long-term relationships with their publishers and greater benefits from their works.

Posted by Susan Spann

Susan Spann is a California publishing attorney and the author of Claws of the Cat (Minotaur Books, July 16, 2013), the first novel in the Shinobi Mystery series featuring ninja detective Hiro Hattori. You can find her on twitter @SusanSpann 

Denver Comic Con

This year, I get to enjoy the Denver Comic Con in a most unique way. I’ll start with the drama first.

I don’t get to see my kid nearly as much as I used to. God, how I now enjoy every damn moment with him that I can put my arms around, so with the Denver Comic Con flying our way, a three-day holiday reserved for me and junior, I just can’t wait. Not to be too histrionic, but parents, if you and yours love superheroes, you just about can’t beat this. Enjoy life. If you got the entertainment budget, throw down the 50 for your weekend pass. And your kiddo, if he or she is 10 or under, is free.

Okay, now on to the chipper stuff…the happy ending, if you will. I get to be a panelist. I’ll be on one of the literary panels cheering on the release of my first novel Tattoo Rampage to be released July 1^st 2013. And hopefully by then I’ll have even more REALLY cool news to report about it that’s in the works. But lips are sealed right now.

So on a sentimental final note, this will be such a bittersweet experience for me. Just me and my son livin’ it up all weekend. He gets to tell his school chums that his pop is a writer and guest at DCC. I get to cherish my time with him and other writer friends. And hey, maybe I’ll be able to talk backstage with Peter Mayhew who played Chewbacca. Maybe he’ll carry me and the dudester around on his shoulders!

Gusto

How Big Should Your Platform Be? by Literary Agent Amanda Luedeke

Today, it's my pleasure to welcome Amanda Luedeke back to Chiseled in Rock!  A literary agent with MacGregor Literary, we last interviewed Amanda on April 9, 2012, but today she's talking about platform (yes, that dreaded platform!) and her new book, The Extroverted Writer: An Author’s Guide to Marketing and Building a Platform. 

~ Janet Fogg
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How Big Should Your Platform Be?

by Amanda Luedeke

You’ve heard it before that if you really want to impress an agent or publisher, make sure you have three things: a great idea, great writing, and a great platform.

But let’s be honest, either you’re born with a knack for words or you’re not.

Either a great idea drops into your head one day, or it doesn’t.

But platform doesn’t happen by chance. Platform is all about hard work.

It’s funny that we dedicate entire conferences, workshops, and critique groups to the very components that we have the least control over, but the third component—the one that really can be taught into existence—gets constantly ignored.

My background is in marketing. For some years I worked as social media marketer and copywriter for an agency outside of Chicago. I launched corporate Facebook pages, YouTube channels, blogs and more—all on behalf of some pretty major clients. So when I transitioned to publishing, marketing wasn’t scary at all. It was doable. It was conquerable. So, I started blogging about it on our agency blog. And from that, a book was born.

The Extroverted Writer: An Author’s Guide to Marketing and Building a Platform is jam-packed with tips, tricks, rules, and tools for developing a platform, whether you’re published or not (!). I cover Facebook, Twitter, websites, blogs, Pinterest, and more.

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To give a taste of some of the insight I provide in the book, here’s an excerpt:

The Numbers

Solid author platforms come in the tens or hundreds of thousands.

Let’s get more specific.

If you have a website or blog, your monthly unique visitor count should be at least 30,000.

If you have a Twitter account, your followers should be at least 5,000.

If you have a Facebook group, your following should be pushing 5,000.

If you’re a public speaker, you should speak at least 30 times a year, and you should shoot for a total audience number of at least 10,000.

If you write for e-zines and e-publications on a regular basis, you should have your words in front of at least 100,000 readers per month.

If you write for print publications on a regular basis, you should have your words in front of at least 100,000 readers per quarter.

If you’ve e-published, your sales in the first year should be in the hundreds of thousands for a $0.99 e-book and in the tens or hundreds of thousands for a $2.99 e-book.

If you’ve POD (print on demand) published, your sales within the first year should be at least 5,000 copies.

Intimidated yet? I know I am. These numbers aren’t easy to achieve.

The time and effort required to grow such a following might have you envisioning yourself with an impressive platform sometime in the year 2030. You may even be thinking about how you don’t have a single sales bone in your body. You’re an artist, after all, and an introverted artist at that. Those qualities don’t always make for the most sociable, friendly, outgoing, spin-doctoring bunch.

So, what’s the secret? How can these numbers be achieved?

Before you delete all the Word documents containing your manuscripts and then jump off a cliff, there are a few things to keep in mind:

1. Platform is a grand total. Add up all of your numbers in each of the listed categories and see what you have. If you’re nearing the tens of thousands, you’re off to a great start, even if your Twitter numbers are pathetic and you haven’t attempted half of the things on the list. The idea isn’t that you have to do all of these things extremely well. You don’t even have to do all of these things. You can achieve success by doing a few of them really well or all of them somewhat well.

2. Fiction authors could cut these numbers in half. Fiction is a different ball game. An impressive debut novelist can have a Twitter following of 2,500 and a blog readership of 10,000 unique visitors per month and still look impressive to the right editor.

3. It’s a process. It takes time to build relationships and garner a following. You’re not doing yourself any favors by getting down on yourself for having only 100 blog readers after blogging religiously for only three months. You need to allow yourself time.

4. There are always exceptions to the rule. BUT, AMANDA!!! I know someone who knows someone who just got a book deal, and they don’t even know what Twitter is! Yes, this happens. And sure, there’s a chance it could happen to you. In fact, I hope it does! But like I said before, having the right story written at the right time and pitched to the right editor or agent involves a lot of luck. Platform is about hard work and creating something that simply cannot be ignored. It really is the one thing that you can control.

When your book sells really well because of the platform you built, and your publisher wants to do even more books with you, all of this will be worth it. Trust me.

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What do YOU think about these numbers? Are they doable? Daunting? Energizing? Sound off in the comments below.

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Amanda Luedeke is a literary agent with MacGregor Literary. Her background is in marketing, and her book, The Extroverted Writer, is available now from Amazon, Barnes & Noble, and Smashwords. Amanda represents romance, literary fiction, speculative fiction (fantasy, science fiction, urban fantasy, horror, paranormal, etc.), YA, and nonfiction. Catch her at BEA, RWA, ACFW, and more.

Thank you, Amanda, for joining us on the Rock!

Janet Fogg
Janet is the author of Soliloquy, an award-winning historical romance, and co-author of the military history bestseller, Fogg in the Cockpit.

What Happens if the Publisher Doesn't Pay?

A publishing contract often contains stiff penalties for author nonperformance, but authors should also make sure that the contract has consequences for publisher nonperformance, too - especially where royalty payments are concerned.

In addition to termination rights when the work goes out of print, authors should try to seek termination rights (and rights reversion!) if publishers fail to pay royalties when due. Like all termination clauses, these can be tricky to read, and it’s important the author know what to look for in the language.

1. Termination Timing. The contract should specify how long the author must wait before terminating for non-payment of overdue royalties. (Note: this is different than the publisher's failure to pay if the book doesn't sell. No sales means no royalties are due.) Sometimes the contract will state how much the publisher must owe the author before termination becomes an option (for example, allowing termination only if the publisher fails to pay $250.00 or more in royalties owed). A contract which gives the author ambiguous termination rights also gives the publisher ambiguous rights to keep the contract in force. As always, clarity is key.

2. Rights Reversion. Contract termination is meaningless if the author's rights to the work don't revert immediately and automatically upon termination. Remember: rights reversion should be automatic - not dependent upon the publisher sending a statement of rights reversion.

3. Mandatory Notice. When the contract gives the author specific termination rights for failure to pay royalties due, it’s fair for the publisher to have the right to notice and an opportunity to cure the default. This means the author usually needs to send a written demand describing the publisher’s breach (in this case, non-payment) and the publisher then has a stated period of time to correct the problem (here, by payment of royalties due) before the author can terminate the contract. Read the notice provisions carefully and ensure you understand how to comply if the need arises. If you can’t understand the procedure, or find it unreasonably difficult, you need to revise the provision before you sign.

4. “Grace Period” aka “opportunity to cure.” This is normal and reasonable. Just make certain the cure time is clearly stated (usually 10-45 days) and that you are willing to agree to the length of time the contract describes.

5. Don’t panic. Not all contracts have specific clauses describing the author's termination rights if the publisher fails to pay royalties on time. This doesn’t mean the author has no rights. Any time a party to a contract fails to perform as the contract requires, the other party has rights and remedies. (Though they're easier to enforce when clearly stated.) 

 If the publisher doesn’t pay your royalties, you still have rights and also the ability to demand the money owed to you. However, if the contract doesn't state your rights specifically, you may need legal assistance to help interpret your remedies and options.

As always, if you have questions about this or any other publishing law issues, please feel free to ask in the comments or find me on Twitter, @SusanSpann.

Posted by Susan Spann

Susan Spann is a California publishing attorney and the author of Claws of the Cat (Minotaur Books, July 16, 2013), the first novel in the Shinobi Mystery series featuring ninja detective Hiro Hattori.