So far, writing has been a hobby. Yes, I’ve earned money on it, but not enough to live of it. So very far from managing to live off of it. So little I haven’t paid taxes from my earnings, because writing was in the hobby category, not the business category.
But then More Than Anything happened. I earned more on that book than any of my other books put together. And it hit me… taxes! This is business now, especially if royalties continue along the lines of 2014 Q4. I tried to read up on stuff, but it’s written so complicated – not to mention it’s a lot of writing, but it’s not really giving much of an answer. And when it comes to authors… almost nothing at all came up.
So I went to the tax office to ask what I’m supposed to do now it’s not considered a hobby anymore. Earning royalties means me, myself and I are responsible for paying taxes… but where do I pay them? Should I use the same percentage as my employed part-time job? (No. 38% for taxes of royalties! 38% of the net, because at least I can write off the expenses from the gross.) Would it be better if I registered as a “enkeltpersonforetak”? (The Norwegian type of sole proprietorship: the company is considered part of my personal assets.) (And no, I didn’t need that. I could do it, but I didn’t have to. As long as I didn’t have to deal with value-added tax, it wouldn’t matter either way.)
So I got some answers. So much information I’m not sure I even remember it all. I’m pretty sure they said I had three options: pay taxes four times a year, but that requires filling out what I suppose I’ll earn, which is impossible with royalties, so no… I could, on the other hand, hold back on the taxes, put them on a different account (or not, as long as I have the money when the time comes), and then pay it all before May next year. Then I’ll know exactly what I earned this year. So this is what I’ll do. But I’m pretty sure there was an option three there. Oh well.
So that’s okay. I get it. I have a year to figure this out in detail, anyway. I’ll also join a course on taxes and stuff for starting your own business or “enkeltpersonforetak”, a free course even, but it’s not until September. I can also write off expenses, like editors. (But what else? If I have to buy a new laptop, can I write off the whole price or just the value-added tax? Still got questions see…)
How do other author’s do this? I don’t reckon I’ve got anyone from Norway around, but what about other countries? Are you registered as your own business, a “enkeltpersonforetak”/sole proprietorship?