Canadian wanting to self-publish on Amazon, what tax issues must I keep in mind?
March 16, 2011 6:25 PM   Subscribe

I want to self-publish my books on Amazon, Smashwords, Barnes & Noble etc. I am a Canadian (Ontario). What do I need to know about this, for tax purposes, before I start?

Assume I understand about book writing, book marketing, how to get it out there and be a salesperson etc. I have done my research in this area! Assume too that it is feasible to attain a modicum of success (i.e. income) with this little sideline---perhaps not on the level of Konrath or Hocking, although that would be nice, but money just the same. Enough money that I ought to keep some sort of record of it and take care of the accounting/taxes. exactly do I go about this, being in Canada?

I know that Smashwords has a form I can fill out which will give me an American tax number. I know I can use this with Amazon to get some of the tax they deduct automatically credited back. But how will Revenue Canada deal with this? I assume I must declare this as self-employed income---what documentation will they require so that I can prove the amount?

If I make enough income so that I have to pay taxes on it, I will do so, obviously. And You Are Not my Accountant, obviously as well :) If it got to that point where I did have a ton of money from this, I would consult a professional. I am just curious, as I get this underway, about what sorts of records I will need to keep and if any Canadian mefites have been down this road already and can suggest to me what tax/financial shenanigans I will need to keep in mind, outside of the writing/marketing issues.
posted by JoannaC to Work & Money (3 answers total)
I'm not Canadian, but I have an income through self-publishing via Amazon. They report it to me (and to the IRS) as royalty income; I assume they'll do the same for you.
posted by zompist at 6:55 PM on March 16, 2011

Call Canada Revenue Agency. It's incredible how helpful they are when it comes to get your money! I had a similar situation and they guided me through it, and didn't even ask my name or Social Security Number.
posted by TheGoodBlood at 8:03 PM on March 16, 2011 [1 favorite]

At this point, all this stuff is kept on their server on their back-end. IANAC, but it would seem all the tax service would be interested in is how much you're making. Your documentation on that would seem to be simple - once the year is up, total up the months and go from there.

I would be more concerned with documenting expenses - anything you might have that relates to the writing of the book. Did you pay for a freelance editor, ads, etc.? Those are the records that aren't kept automagically.
posted by chrisinseoul at 6:08 AM on March 17, 2011

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