I’d suggest getting just a couple of business ducks in a row before you put your work on the market.
1. Legal organization
You have several choices here. Also, I am not a tax attorney, so don’t go acting like I am.
Your Name – You just do everything as yourself. Checks get made out to you, you deposit them in your account, you include payments you receive on your personal taxes.
Your Name Here, incorporated. – You can incorporate and get an “inc” after your name. This removes risk from you personally. You do have to be wary of double taxation, meaning your corporation pays income taxes, and then you pay income taxes on the money your corporation gives you. There’s plenty of info on the web about incorporating a business.
DBA - This is just like using your personal name for tax purposes – everything goes on your personal return. Only with a DBA, you get to pick another name that folks can write checks to, like “Best Books Ever”.
LLC - This is how I structure my writing business. It’s a good way to form a company without the rigamarole of forming a corporation. If you are the only member of an LLC, the taxes are pretty easy, too, as the LLC doesn’t get taxed, all the income just passes through to you personally. You register your LLC with your state, and your state divition of business or commerce or whatever they call it in your neck of the woods probably have detailed instructions on how to do this. For example, my state does.
Having a legitimate LLC or Corporation will most likely allow you to actually deduct stuff that furthers your writing carrier. If you advertise your book on your car, you may be able to deduct it. If you have a computer that you use to do all your writing, you may be able to deduct it. Again, I’m not a tax attorney, so you should consult one or do your own research before attempting to deduct stuff.
You can find lots more information on the Small Business Administration website.
2. EIN
This is a number similar to your personal social security number. You’ll need one if you will be receiving payments sent to your LLC or corporation. This is free and easy to get. You just ask the IRS for one, and they give it to you. You will need some info that you received while setting up your LLC or corporation. I did this via phone and got my LLC’s EIN immediately.
3. Banking
Unless you are already an accounting wizard, you should get a separate banking account your your writing/self publishing transactions. You’ll have to get a separate account if you’ve organized a formal business (LLC or inc) You’ll need your EIN to set up a business account. Shop around and find yourself a free account for now. You don’t need bells and whistles, you just need a place to stick money.
You’ll probably want a business Paypal, account, too. You’ll need your EIN, and banking information for the business bank account you just set up.
4. Accounting
Get a software package and keep track of the royalties that will be pouring in. Quickbooks is a great way to go if you’ve had any accounting or bookkeeping experience. Quicken has a version for small businesses that is a little easier to use. There’s also plenty of free accounting software out there you can check out.
Once you’ve got that stuff set up, you’re ready to dig in and get self-publishing.