Topic: Do published authors on this site incorporate?

I came across an article recently about the fact that Dan Brown, author of The Da Vinci Code and other popular novels, has been sued more than once by others claiming he stole their ideas. I believe so far he's always prevailed, but it got me to thinking. I know Bobbie, on this site, incorporated for publishing purposes, and I'm curious what others here do. The cost of an accountant to do a corporation's taxes probably isn't cheap.

Thanks
Dirk

Re: Do published authors on this site incorporate?

Hello, Dirk.

I bought the first two books in a "Self-Publishing Empire" series. The author did strongly suggest incorporating and publishing under that business entity. Mostly for tax purposes but for some limited protection as well. I've done so (actually an LLC), but down the road I intend to do more than write, so I'm planning ahead. And yeah, hiring an accountant can be costly, but you'll probably get enough tax breaks to offset that cost. Assuming you even make any money at this--I don't expect to turn a profit until many years have passed, unless I get really lucky. I do anticipate book covers and editing costs, so I'll have monies spent to claim. We'll see how that affects things.

I've also recently read advice from an author's legal handbook that says incorporating doesn't really offer all this supposed protection and doing taxes isn't that hard if you're running with a DBA (doing business as).

So it depends on where you think you'll be in a few years. A hobbyist just having fun, or an authorpreneur intending to fund your way into early retirement. You can always bounce between incorporating and not, so don't feel like one way or the other is constraining. I just decided to lay some groundwork while things are quiet, and keep my fingers crossed.

Sadly, the self publishing empire series seems to have come to an abrupt end. I think the author may have passed.

Here're some linkies:

https://www.amazon.com/Entity-Set-Up-Bu … s9dHJ1ZQ==

https://www.amazon.com/Self-Publishers- … amp;sr=8-4

Hope this helps!

3 (edited by Dirk B. 2022-03-11 13:49:23)

Re: Do published authors on this site incorporate?

Thanks, Seabrass. Very helpful.

Re: Do published authors on this site incorporate?

I thought about incorporating before I published, but decided against the extra paperwork/hassle I'd have to go through. Publishing on Amazon wasn't difficult and as Seabrass says, DBA (Doing  Business As) B. Douglas Slack is quite easy (at least using TurboTax). I get a 1099 form from Amazon telling me how much I made for the year and include it as income. No biggie. As for the self-protection against lawsuits, that really didn't worry me all that much as I am, admittedly, small potatoes.

Bill

5 (edited by Dirk B. 2022-03-11 17:16:09)

Re: Do published authors on this site incorporate?

I bought the legal guide from the link provided by Seabrass, and another option to deal with potential lawsuits is insurance. Not cheap, though. $1000 - $3000 for Media Perils Insurance, although that's the Cadillac of insurance. The guide itself is excellent and only $6 for the Kindle version.

Re: Do published authors on this site incorporate?

I dare say that for most TNBW members, the income from writing would not be such a large amount that incorporating for tax purposes would make sense economically. As for protecting personal assets from lawsuits by incorporating, that is not likely to work. A good article on that subject: https://www.thebookdesigner.com/should- … ncorporate

As Dirk suggested, insurance might be a way to protect yourself, but the more the covered amount, the more expensive the policy premium will be, naturally. And an extremely angry celebrity who took umbrage on the way you depicted them in your story could sue for defamation beyond whatever your covered amount is.

To be on the safe side, you should always assume your book will reach the NYT bestseller list when you have real people/businesses in your stories. You don't want unflattering depictions of them come to their attention!