Well…the IRS is stealing 30% of your royalties if you’re a non-American self-published author selling books anywhere they deem to be ‘America’. But the title got your attention!
Unfortunately, the American government forces Amazon.com, for example, to withhold 30% of any royalties made there for tax. Yes, even though you aren’t American, don’t live there and, technically, aren’t selling a damn thing there. Same thing if I sell a hardback to an American via Lulu.
So, here is what to do. I’m aiming this at people from the UK, selling on Amazon; but it’s pretty much the same for anywhere else, you just send off the form to them instead. Also, in terms of Amazon, this 30% withholding only applies to sales on the .com site – no tax is withheld for sales from Amazon.co.uk, .de, etc.
I just did this yesterday, using the advice in this blog. The only thing left is for Amazon to receive the form and stop withholding 30%. I’ll update when that happens.
For a while I thought I knew exactly what I needed to do, and just had to get round to doing it. As it turned out, I’d been given the wrong information. Or at least correct but not as needlessly complicated as some people would have liked. The next lot of information I was given was more complex, and included having to get a letter from everyone who sold my book to prove I was making money ‘in the US’, filling out a form to get a number to fill out another form, and then sending said form along with said letters and my passport off to America.
Well, it might not be rubbish, but it is, as I said, needless. It’s just complicated to understand. I still don’t completely understand, but I’ve done it, it was easy, and according to the above blog, it works perfectly. Again, I’ll update to confirm my own success.
You need an EIN (Employer Identification Number) or an ITIN. I originally got an EIN and that is what the IRS told me I needed; however, as I update this (Dec. 2016), Amazon’s tax interview that has to be filled out refuses to accept the EIN as it thinks I should have an ITIN. Technically speaking, this requires an SS-4 form, but it isn’t entirely necessary as you won’t actually be sending the form anywhere. It is helpful to fill it in, however, as you’ll be asked what you put on line x, line y, and line why can’t we have your money. So, fill in:
• Line 1, 4a, 4b and 6 – although you’ll probably know your name and address anyway!
• In section 9a, tick ‘sole proprietor (SSN)’ – leave the boxes blank unless you have a US social security number
• Line 10, click ‘other’ – Here, Amazon suggests some long line, but when I read that out, the IRS man was a little taken aback and would clearly have been satisfied with ‘To fill out a W-8BEN form’
• Line 16 and 17 – I just have ‘Writing’ in both of these. The person you speak to at the IRS will be filling in the form for you, so simply explain that you’re a writer in need of an EIN/ITIN so that you can fill out the W-8BEN, and they’ll know what to put
• Lastly, on line 18, tick ‘no’
That’s it. As I said, you won’t actually be sending it anywhere, but you’re advised to keep a copy for your files, so it may be worth filling in anyway. Plus, I had no idea the IRS man (Mike) would be expecting me to have it filled in, and so I was lucky to think quickly enough to tell him what to put. So it makes things easier for you.
Now you’ll need to ring the IRS. I spent a very long time trying to get through the IRS at the London embassy, and no one answered the phone – I hate to think what my phone bill will be. But I’m not 100% sure they can even do this from there, so ring the IRS direct in America.
The number is 001 267 941 1099. I phoned at about 4.30pm and only had to wait about three minutes before someone picked up. This is the direct line for acquiring an EIN/ITIN. You’ll need to press 2 at the options, or simply stay on the line. When Mike answered, he introduced himself and asked if I was applying for an EIN/ITIN, if I was resident outside of the US, and if I had the SS-4 in front of me (I said yes here, not realising he meant a filled in SS-4). From there, there’s nothing difficult.
Remember to explain early on that you’re a self-published writer and need the EIN/ITIN so that you can fill out the W-8BEN. That will give him/her a better picture of what they’re putting on the form.
After asking you what you put in the above lines, he/she will put the information through. Then while you’re waiting they’ll tell you that you’ll be getting a letter with confirmation of the number in, I think, 4-8 weeks. Then they’ll give you the number there and then. Write it down, obviously, and put it in the top right corner of the SS-4 form, so it’s kept in a safe place.
And that’s the way to get the EIN/ITIN, which others would have you believing is a complicated, life-sucking procedure which will take weeks and weeks.
Now you just need to use this number to get Amazon, in this case, to stop withholding 30% of your royalties. For that, you need the W-8BEN form.
It’s in a PDF format that allows you to fill it in on your computer, but to be safe I printed it out and filled it in by hand.
Now, this one is going to Amazon, so I used the advice on their page about filling it in, as well as a little from Silentnovelist at the above blog. Fill in:
• Your name in section 1
• ‘N/A’ in section 2 – I don’t honestly know why that’s not ‘United Kingdom’, but that’s what Amazon say to do. Perhaps it’s because the ‘organisation’ is you, and so not really based anywhere. Or perhaps it’s because there is no corporation
• In section 3, tick ‘individual’
• In section 4, put your address, obviously; and ‘United Kingdom’ for country
• In section 6, put in your new EIN number, and tick ‘EIN’, or the same for ‘ITIN’
• In Part II, section 9, tick both ‘a’ and ‘b’, and put ‘United Kingdom’ in the box at ‘a’
• In section 10, in the second box about the percentage of withholding, put ‘0’. In the next, type of income, put ‘author/writer’. In the third, the reasons, write ‘British citizen and resident of the United Kingdom’
• Lastly, at the bottom right, ‘Capacity in which acting’, write ‘self’
Then all you need to do is sign and date (noting that Americans write their dates ass-backwards).
Step Whatever Number We’re On Now
All that remains is to send it. So send it. To this address:
Amazon Digital Services
c/o Vendor Maintenance
PO Box 80683
Seattle, WA 98108-0683
Include with it a letter saying who you are (your pen name, if you use one), and asking them to confirm when they receive it and stop withholding.
I haven’t written mine yet, but it’ll be something along the lines of, ‘I enclose form W-8BEN, upon receipt of which I understand you will no longer withhold any percentage of my Amazon.com royalties for US tax, and I will receive 100% of those royalties.’
Remember to include your email address, asking them to confirm.
That should be it. The post office is closed today, so I haven’t found out the best way to post to America, or what it costs, but I will do so on Tuesday and update.
I hope that helps. Moreso, I hope someone who it CAN help reads it. And thanks to Silentnovelist at the aforementioned blog for helping me in the first place!
EDIT 3/8/12: I have now had confirmation from Amazon that my tax rate is now 0%. So, all is well, and the above worked fine 🙂
Thanks so much for setting this out step-by-step, and even box by box! I’ve bookmarked this blog post for when we come to jump this fence. Much appreciated.
Ok 🙂 I used the guide in the blog I cited, but I thought I’d write my own too. Apart from anything, if I’m particularly unsure of something, like I was with this, a step by step walkthrough is very helpful. And the more obvious it is, the better – even down to saying what the IRS man said to me on the phone. I should have updated again to say this has now got me 0% withholding for Amazon, Createspace, Smashwords and Lulu.
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Awesome. Called the IRS number listed, waited 10 minutes, gave the information indicated for the EIN and got one immediately.
Thanks for the info page!
Ok 🙂 Most other guides I read were needlessly complicated, so I wrote this.
Thanks for doing this post, Ross. I’m looking into self-publishing and, having been unable to find an equivalent UK site with the reach of Smashwords & Amazon, will need to get myself an EIN soon. I’ve bookmarked your page!
Good luck 🙂
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Thanks buddy this was very helpful
Good 🙂 Hopefully the number still works – though if not, it won’t be that hard to find an up-to-date one. Although everything else goes for most non-Americans, the number only seems to work for people in the UK (or, at least, doesn’t seem to work for Canadians).