Friday 1 March 2013

Hassle-free Taxes for Non-US Authors

At last, I have an IRS number!  After all the struggles I spoke of in my 2011 blog post NO ESCAPING TAX PAYMENTS, multi-talented romance author CLAIRE ROBYNS sent me a list of the steps she followed to get her ITN (Income Tax Number) from the dreaded Internal Revenue Services (USA). 

Claire had found the excellent and detailed blog post by Irish author CATHERINE RYAN HOWARD very helpful and passed on a useful list of steps to follow:

1. Phone 001 267 941 1099 (This is from SA, check your international codes and this is a USA number. Time difference between South Africa and USA is approx 6 hours, so factor that in when you call as well)

2. You'll get through to an auto-responder and be asked to select number options

3. I selected "1" and was put through to an on-hold waiting pattern. I waited about 2 rings (Claire pressed 2,  had to wait about 15 minutes , then was  transferred to another department and put into a waiting queue for another 10 minutes, so 25 minute wiat for Claire altogether). When the lady answered, I said "I'd like to apply for Tax Withholding for a foreign entity"

 4. Both Claire and I had no problem with our operators - they immediately took us through the questions and steps to get our ITN number. But there are stories on the 'net where, at this point, they might mention the SS4 form and say you need to fill this in. In that case, either say "I was told I can do this directly over the phone" and they should accept that and continue. If they get sticky, simply put phone down and try again a few minutes later to get through to someone else.

5. The Questions/Answers: The IRS telephone operators  basically take you through the SS4 application form. You can look at an SS4 form on the IRS website here.  If you take a look at the SS4, you'll see what they ask. But basically, they ignore most of those questions and simply ask what they need from you. You may need to spell your answers out, and then they'll spell it back to you, to ensure everything is correct:

   (a) Full Name (I gave my full legal name)

   (b) Trading as Name (my trading as name, Aztar Press)

   (c) Mailing address 

   (d) postal address (if different from mailing address)

   (e)They will ask if this is for compliance with withholding (I answered yes)

   (f) first day of business (I chose 1/March/2013 because that is the date I've registered with South African Revenue Services). 

    (g) how many people you think you might employ in the next 12 months? "0"

    (h) the nature of your business? I said, Retail - selling books through US distributors such as Amazon"

6. And that's it. They'll spell all your answers back to you, and then she'll say, "You need a pen to write down your ITN (or EIN) number ..." The operator then advises you that you'll receive the official form with your ITN number on it within two weeks. 

I asked if she could email it to me, but it can only be faxed to a place where you are or mailed. But, at this point you are an officially registered taxpayer with the IRS!

Nothing is this easy, right? Like Claire, I was very nervous before phoning, but both of us found the IRS operators so friendly and helpful. Nothing like the big bad IRS wolf I'd expected!

The next step is then to fill out the W8-BEN form and submit it to each of the places you've published with (Amazon KDP, Createspace, Smashwords). Catherine Ryan Howard gives a detailed step by step outline of how to complete the W8-BEN form, which you can download here.  

After that, you send of the forms to the distributor addresses listed on Catherine's website and you're safe from paying double taxes on your hard-earned royalties.

Whew. I, for one, am glad that's over. 

With thanks to Claire Robyns and Catherine Ryan Howard for their fantastic tips and advice on how to escape the hassles of paying tax to the IRS. Good luck registering yourself because remember this: there is no escape from taxes!

DISCLAIMER: I must be more brainwashed about tax after 20 years with my hubby Dr Beric Croome than I realised. This article, and my idea for the 2011 tax article were all my own - a middle of the night brainstorm!  One doesn't get free advice from tax lawyers, I'm afraid, not even when you're married to one!!! :)


Anne Gallagher said...

They say the IRS has the most pleasant of all the phone operators in the U.S. govt. offices. I'm glad things worked out for you and your friend.

Judy Croome | @judy_croome said...

ANNE: The two IRS operators (Claire's Mrs Smiley - I kid you not!- and my Miss Hilton) were both amazing. We were really impressed with them! :)

Talei said...

That great news, Judy. Dealing with any tax dept but particularly one overseas, is pretty daunting. Good to know they are helpful! Happy writing and thanks for stopping on my blog today. :) x

Hilary Melton-Butcher said...

Hi Judy .. such a helpful post to so many .. thanks so much for detailing it out.

Congratulations on obtaining the USA tax ref number -

Now you can concentrate on writing more - enjoy that .. I'll be over to get the books I'm missing ..

Cheers Hilary

Rebecca A Emrich said...

wow, impressive, I was a bit worried to do my own but this has put my mind at ease. I didn't think it would be so easy.

Judy Croome | @judy_croome said...

TALEI: The thought was daunting, but lucking the actual experience wasn't! :)

HILARY: Oh dear! I wish I could say I'll be writing more. At the moment am in a complete burnout and just getting through each day with as little social media and writing as possible!

REBECCA: I put it off for ages, until Claire told me how easy it was, and now I don't know why I waited so long. And I'm so glad I'm registered. :)

CA Heaven said...

Thanks. That's extremely useful information. I consider trying Amazon selfpublishing, but had no idea of how to get around these non-US citizen trouble >)

Cold As Heaven

Judy Croome | @judy_croome said...

COLD: On my return from vacation (at a perfect beach in Umdloti!) I was pleased to see you found the post of taxes useful! And I'm even more pleased to see that you're at the stage of looking at getting your book out there. Off to your blog to see what I've missed! :)

Rob Van De Laak said...

Strange. I sent an email to them more than a month ago, and have not had a reply yet. Think I might try the phone too.Just one Q. Is it a toll free number, even for Australians?

Judy Croome | @judy_croome said...

Rob, I first tried email as well, but phoning really is much easier, even when you have a long wait time. I can't answer that about whether it's still a toll free number if you phone from Aus - perhaps you could ask your local telephone services?

BTW, my uncle used to knit and he also did the most amazing tapestry work! So, good on yer, mate! :)

Rob Van De Laak said...

I rang the IRS today. From Australia it is only 1, instead of 001, then the rest of the number on this site. I spoke with a MR Witt. CPP-Competent, professional, and polite!I'm used to dealing with our local Federal Govt agencies, and they could learn a lot from this man. Quick and painless, once I pulled up a copy of the SS4 form. I'd recommend them to anyone!