STATUS: I’m being sarcastic in that subject heading.
What’s playing on the iPod right now? LONG HOT SUMMER by The Style Council
One of the drawbacks of having foreign clients is the accounting. (Don’t worry Sarah Rees Brennan—I still love you!). Today was all about figuring out the tax issue for Sarah because she is Irish and currently lives in Ireland but we sold her book to a U.S. publisher.
Here’s what we had to do (we being all involved, me, my tax person, and Sarah’s Irish tax person). First, we looked up the tax treaty between the U.S. and Ireland (and it differs depending on the country). Luckily for me, per the tax treaty, my agency does not have to withhold any income tax and Sarah will be taxed in Ireland on the income received.
So great. I don’t have to withhold or send monies to the IRS but no, my job is not done yet. I still have to have Sarah fill out the W8-BEN form for my files. Then I have to file form 1042, 1042-S, and 1042T (transmittal form) just to show that she is exempt and I didn’t withhold monies per the tax treaty.
Which means I’m filling out numerous forms so I can simply put the number zero on all the appropriate lines.
To verify, I called the IRS just to make sure that we had all the necessary forms in hand and nothing was missing. This took 2 hours and a transfer to no less than four departments at the IRS.
Needless to say, I’m not completely confident that even the IRS knows exactly what has to be done but I’m sure they’ll tell me if I neglected a form!
Sounds like you all need a pint of Guiness to recover! And the “beauty” of the IRS is that if they give you the wrong info over the phone, it’s still your fault if the forms are filled out incorrectly. Oh, dear! Better make that two Guinesses and a Jameson’s!
Good luck!
Ans some writers wonder why they need an agent!
Please extend to Ms. Brennan and I’ll Irish persons my sincere gratitude for Liam Neeson.
😉
I understand, believe me! I am American and published by a British publisher. The first time around, it was a nightmare waiting for my advance. Long story, but I feel your pain!
Did I mention that I do taxes professionally? But only the partnership forms. 🙂
I don’t know anything about int’l tax treaties, which is a shame, b/c I didn’t realize until too late during my accounting program that I hate auditing and love tax.
Ahh yes, taxes: I would simply be horrified to be a freelancer publishing a book in a foreign country and have to do all those forms myself.
Ah, try talking to my (UK-based) agent about this one. She’ll tear her hair out. Here in Malaysia, writers do not get taxed at all on income coming in from overseas. So I cannot get then to sign any forms to release all or part of the witholding tax.
Which means I get whacked with ENORMOUS taxes in countries like UK and France and cannot claim back a cent in expenses or deductions from anyone at all. It is heartbreaking. My wonderful agent it trying very hard to work around this (legally!)at the moment…
The IRS is so hard up for help, they hire anyone who walks in the door – even the ones who didn’t come looking for a job. Homeless people, escaped convicts, out of work writers – I’m telling you, they’ll hire anybody. As a tax focused CPA, I have to make my share of IRS calls and it’s always a crap shoot whether I’ll get someone with a clue, or without. The idea of calling with anything as complicated as International tax law…tell your tax person they rock at life.
Hi, I can’t find any contacts on your blog. Can I ask you to send a note for me? My email is in profile.
Thanks, Chris
I used to have a U.S. agent for my design work, and the accounting was quite straightforward. I don’t remember having to fill out anything for their files, and once a year they sent a 1049 (I think) totalling the amount I’d received in that time. I would then pay tax here in the U.K.
Perhaps they used a different system; more likely, as with most things related to the movement of currencies, the system has become more complex.
My father is a small business auditor for the IRS. I wonder if I’d get more requests if I start putting that in my queries? 😉
Great, another foreigner snatching up an American job. Thanks for the patriotism, Kristin. You couldn’t find an American author to work with? Traitor.
This tale about Ireland and taxes just goes to prove that writing is also a business. Producing a manuscript and finding representation are just the tip of the iceberg.
If Anonymous at 9:42AM is so offended, then why not query Irish or UK agents. Where does it say that we ‘Mericans can’t do the same thing? I’m sure that someone reading this blog can point to a US author who sells far more in other countries than they do here at home.
touche.
I thought anon 9:42 was joking.
I’m pretty sure anon 9:42 was kidding. ‘Cause I laughed.
Anyhoo, is it the same fiasco for Canadian authors? There must be an information database for agents to pick each others’ brains. There’s gotta be a standard set of forms somewhere.
If anon 9:42 was really kidding, then just look for the tongue stuffed into my cheek when reading my post.
Apologies to anyone who took offense at my comments.
Writing is a tough business that seems to be getting more global all the time.
I like to add a bit o’ jocularity to all posts – even those that clearly don’t intend to be humorous. It makes life so much more fun.
And I do hope I didn’t offend anyone with my Most IRS HelpLine Employees are about as much help as a one-legged man at an ass-kicking contest comment. I was joking.
Well, mostly. LOL!