T.S. Eliot paid taxes too

I've come to gain new insights on T.S. Eliot's "Wasteland." April is the cruelest month because he's a writer, and April is when you get your biannual royalty statements as well as pay taxes. Often the latter negates the former.

If you would rather not know the economic realities of being a writer, please don't read this post. Sometimes I get emails from people who are angry with me for being honest about the writing industry and discouraging them. I don't want to make you upset. I you'd really rather not know, again, please don't read.

When I first published the goose girl, Dean and I made a "seven year plan." That is, in seven years, we said, we'd be able to live off what I make as an author. It's been seven years, and it ain't happening. Happily my husband likes his job and has no desire to leave it, but I know from the assumptions I hear from others that the reality of a writer's wages may be news to many of you. I could safely live on my income if I were single, and some years I could support a family on my income, but other times it would be way too risky not to have a second income to depend on.  But I do think many of my blog readers would like to understand the back side of it, because I never did.

1. Generally, authors get paid twice a year, but only if they've earned out their advance. Some books earn out their advance in the first six months, but others never do. This is not a stable income. You never know how many books will sell. With checks coming in April and October for mystery amounts, it's hard to depend on royalties to pay the bills. You really need a steady source of income when you have a family.

2. As we're self-employed, writers don't get benefits like health insurance. In a few states, if you join the Writer's Guild you can be covered by a group plan, but not in Utah. And for insanely stupid reasons, Dean and I are not insurable privately. Either we have group insurance or nothing. We not only need Dean's steady income but his insurance benefits.

3. Taxes. Boy howdy. Because I'm self-employed, add an extra 15.3% to my tax rate. I get taxed hard. Really hard. I never imagined how hard.

4. An author gets a small percentage of a book's earnings. This may seem unfair, but when you look at everyone else in the chain--publisher, editor, publicist, distributor, bookseller, etc.--you see that no one is getting rich. This is just how it is. For a paperback children's book, the usual is 6-8% of the cover price, and hardcover is 12-15%. (Note that paperback refers to trade paperback. The royalties from a Scholastic book fair edition, for example, are much, much, much, much lower.)*

5. Agents take 15% off the top.

6. A chunk of your royalties are often held "in reserve" for up to 18 months against returns. So when a bookstore orders copies of my books from the distributor, some months later I'll get a royalty from those book sales. But if the bookstore doesn't sell them and returns them (and this happens all the time to everybody) then the next pay period the publisher will take those royalties back. Again, unstable business.

Say an author sells 100,000 trade paperbacks one year. Wow, that's a boatload! That is an impressive number and one any author would be thrilled to have. The total sales add up to about $800,000, while the author's royalties on that would be about $48,000--a respectable income. But take out agent and taxes, donate the max to a SEP IRA to offset more taxes, pay the babysitter (if you're a mom like me), and out of that $48K, you have maybe 10-15K to pay rent, utilities, car, food, etc. A great second income, but most likely not enough to support a family.

Well. We all knew it wasn't about the money, right? Many children's authors make a living not from book sales but from speaking fees. Authors can do school visits and be featured authors at conferences and book festivals, most of which pay an honorarium. Also, if you have a degree along with publications, you might get work teaching. These are great opportunities for added income, but ones I don't partake of because I was lucky enough to begin publishing early in my life when I have young children, and I can't leave them so much. And if I did, I'd be paying more babysitting costs, which would take about half of what I earned anyway.

So how do writers become rich, or even self-sufficient? Most do not. We hear a lot about the big name authors, but they are the exception. For the majority of authors, writing novels is not a stable career. The illustrators I know enjoy doing picture books but make their income from other sources, like doing book covers or ads for banks or whatever other small jobs their reps can score for them. So you do it because you love it, you do it because you have no other choice, and you get an education and plan on a second career.

Please know that I don't mean this as a complaint. I love my career. I'm so grateful to get to be a mom and have my dream job. But if I see one more Hollywood movie or TV show portraying filthy rich novelists, I'm going to knock some heads. It's just not reality. Here's reality: I'm sitting in bed in my pajamas, leaving shortly to go pick up my son from kindergarten. My house is crazily cluttered because my kids have a lot of freedom while I've been sick and I throw up if I lean over to pick up things. My 3-year-old is singing a song about candy in the kitchen. Why candy? Did she find a cache somewhere? I thought we'd cleansed the house of her favorite drug! I'm risking candy spazzes and huge messes to take 10 minutes to write this blog post. I will probably have 15 minutes of clean up to pay for her 10 minutes of unsupervised freedom. But last week I finished a first draft of a new book, and today I'm going back to revise another book, and I have this wonderful second life that rides alongside my mother life. It's very cool.

*I always need to add a note when revealing an author's percentage of the book. Even though we get very little per book, it still means a GREAT deal when people buy our books. If our books keep selling, then we get to keep writing and publishing. Even if we're not making a lot of money, we are making some and get to continue to do what we love. As well, it makes a difference when people check our books out from a library. Libraries keep track of circulation numbers. If our books circulate well, then when a new book comes out, that library system is more likely to buy copies. Authors love libraries!

Comments

[katie]

Very interesting blog post. I love finding out all the details even though I don't plan on ever being a writer. It is hard work!

I do always find it curious when writers are portrayed with a lot of money. Now I know it is usually false!

[Je Reve]

Yeah, I want to write someday, but I adore baking, so I hoping own a little shop somewhere, and write...

You forgot to mention getting to be with your family (most of the time) when they get home. Another good excuse for an oversized library. And getting paid to do interpretive dance, too....

[AP]

i really appreciated this post. i am working on my first [full length book] (which i already know probably wont get sold as its my first, but i sure as heck am going to try!) and i've read so much about how little writers actually make. i'm okay with that. i don't write to be rich and famous i do it cause there are people in my head that wont leave me alone until i've put out what they want me to! and because its my passion. - however it is still good to know the nitty gritty truth about what really goes on because we all know we can't rely on hollywood for the truth in anything!

i was just at an aprilynne pike signing and she was telling us the same things except it was about being published and that you just can't trust hollywood to give you an honest portrayal.

i'm grateful for honest writers like you and aprilynne who will pave the way for future published authors like myself! :)

[sara z.]

Tell it, sister!

[Dr. Sallie N. Cheinsteen]

Hmm... and so the world of reality mixes with that of fantasy. We all have a fantasy and dream about writing, and what it is, and what we will have, if we do it. We all read books so we can dream about these characters, and what they do, and what they have as well. There's mostly just pain when we wake up from it, thrown back into the world of reality.

And somehow, for some reason, it just makes me want to do it all the more- that is, both write and read. Thanks for all of your hard work and being a good example for us, Shannon. We all appreciate it. :)

[Enna Isilee]

How fascinating! I had always wondered about this.

[Kimberly]

What a fabulously informative post. Thanks for taking the time, and for writing it without rancor or bitterness. It's never fun having a bubble popped, but you did it so nicely!

[Princess Loucida]

Thanks for the insite!

[Kristi]

I love this post, I am sharing it with my hubby. He has claimed a few times that I am personally funding your kids through college! I have all of your books, a few I have 2-3 copies of, for my girls and to lend. I also give your books for presents. So... while I am sad that you don't get a bigger cut - I can certainly understand the need to feed the children of editors etc too;)
Thnk you again for your amazing books!!!! We love you around here!

[Annette]

And people think we're rich. Hahahahaaa!

One more "fun" element that many people don't realize is how long the process of submission-publication-royalty check can take. You can write a book, send it in, and not see a dime for literally years.

[Amy Jo Lavin]

Thanks for the honesty. As a single mom and a writer, I guess I won't be quitting my day job any time soon. But I already kind of expected that, so I'm not too disappointed.

[Heather Z.]

Wow, I love this post. It's so good to hear the realities beyond the rose-colored versions. And you said it in such a nice and straightforward, no-nonsense way! Thank you! This has to be one of my favorite posts you've written.

[Susan]

This was really interesting. I had heard that the "big dough" often comes from having a movie made of a book. I could see how that would be true based on your post. Thanks for giving us a peek behind the curtain!

[hwalk]

I think the reward in writing isn't the money at all. It's having people read what you wrote, and having them like it. That is worth more than any amount of money.

[jennie w.]

I'm glad to know about libraries. I always feel bad that I'm just checking a book out instead of buying it.

[Kristincashore.blogspot.com]

Shannon, thank you for taking the time to post this.

I think the biggest reward for writing? Is writing.

[Shannon Morris]

Thanks, Shannon, for your continued honesty and candor. You are one of my favorite people for so many reasons.

[Trisha]

I have read the suggestions for writers on your website and found it extremely informative. But sometimes I still dream of being Stephenie Meyer. :-)

[Annette]

Oooo, fascinating, Shannon. Thanks for the post, and thanks for doing what you love. I think you know, we love what you do!

[Delia]

Definitely nice to know that libraries help too.

[Zina]

Thanks for your frankness! I have been so very curious as to what authors really make.

I have the being-in-pajamas-while-the-house-goes-to-pieces part of the writer's lifestyle down. :)

[Marisa]

I am so appreciative of this post. I always enjoy your blog (it is unfailingly entertaining and informative) but I especially loved this one because you gave such specific answers to some questions I've been having. Thanks for taking the time to write it, and I hope you're feeling better!

[Sondy]

Shannon, thanks for this honest post. I guess I'd hoped that maybe a brilliant and prolific writer like you was able to make a living that way, but this gives a dose of reality!

I used to dream of quitting work and focusing on my writing. When my husband left me, I realized that wouldn't be an option. I got my MLS and became a full-time children's librarian, and I have to say that it has only enhanced my writing. In 2010, I haven't missed a day of writing at least 30 minutes a day, and I'm surprised how far that gets me.

But I just got notice that I'm being laid off due to library budget cuts, so your post helps me keep from going too far indulging in the fantasy of using my writing to support myself and my son.

I worked part-time while my kids were small, and cherished that time. I'm so glad you get to have that time with them. A big thank-you to Dean from all your readers for enabling you to give your time to writing!

[Laini Taylor]

Hi Shannon! What do you mean? I keep thinking I'm going to get rich ANY DAY NOW. Snort snort! Great post! And more importantly ... I'm a bit behind the news here, but huge congratulations on your forthcoming *project*!!! Wow! I was JUST joking to Jim: what if, when I get pregnant again (lackadaisical efforts underway :-) we find out it's twins? ha ha! I'm so happy for you. And I can add to your horrible twin names. Among the names we have jokingly told our families at various times, and esp good for boy/girl twins:
Dark & Sparkle.
You can have it. Really.
:-)
(hugs!)

[Marianne]

That was very interesting information. Thanks for the post.

[Frogster]

Thanks for this interesting post! Honesty's always the best policy. And you're not the only ones dealing with the extra taxes and such that come with self-employment--my dad's self-employed too. What matters is that you enjoy your work, and of course what your work produces. And I know we all love your work!

[Libbi]

I think this post is definitely helpful for aspiring writers. I think it's important for people to know the reality of it, and test how much they love writing. It's also good that you share your wisdom with people, so that they know what to expect. Me, I'd be writing for a living whether I got 100,000 a year or 10,000 a year. :)

[Myrna Foster]

This is so informative. Thanks, Shannon!

[Emma]

Thank you sooo much for this post! You see, I was watching Becoming Jane, a documentary on Jane Austin. In the film, she wanted to either live by her pen or marry. Why couldn't she do both, like you? Now I know...

[Shawna JC Tenney]

I saw you at the Provo Library yesterday, I had no idea you would remember me! :) Anyway, my husband is a graphic designer contracted with a company, and I do freelance illustration, so for tax purposes we are both self employed. We have no health insurance. It's kind of scary, okay really scary. It stinks! So, it's good that you can get health insurance through your husbands work. As for the taxes, have you ever considered incorporating as an S corp? We just barely incorporated, and we hear it saves a lot on taxes. We found a great accountant guy who specializes in the "self employed." And since you do some team writing with your hubby, you could both be part of the corporation. Just thought I'd through it out there.

[Tawnya]

I love reading your blog, and find your honesty refreshing. I like the idea of your "mother job" and "other job."

But if you are lucky enough to be able to clean a child's 10 minute mess in 15 minutes, I want to trade children. My kids' 10 minute messes usually take at least 30 minutes to clean (longer if I make them "help").

[Calliope1of9]

I love posts like this. Honestly and knowing the reality is pretty cool.

[Chachic]

Interesting post! I'm glad you wrote about this even though I have no plans of of becoming a writer, it's still good to know how the system works. It's sad though that you don't get a bigger cut when readers buy your books.

[Maria T]

...and now just imagine writing children's books in a minority language in a small country where first editions run under 1000 copies... We sure don't do it for the money!

[melissa @ 1lbr]

Way to tell it like it is! There go my dreams of making millions from writing books (of course, I'd have to actually start writing them first).

[Emily G]

I'm not an author and never could be, but I did laugh that you two are uninsured for stupid reasons - that I can relate with. My husband works for a very small company that doesn't offer health insurance so we pay out of pocket (higher premiums for stupid reasons).

Just saying thanks for your wonderful books and glad to know they are coming. While they don't add a lot to your pocket, they add joy to my life. Thank you

[RDZ]

Enjoyed the post, although it made me think of this article I read recently:
http://www.deanwesleysmith.com/?p=607

I'd be curious to know your thoughts on that.

[Nadia]

If you talk to anyone who works in the arts (and yes, I do consider writing to be an art), you'll find that all of this is true. Most actors supplement their income between parts with easy to get and leave jobs like waiting tables. The same with musicians. The percentage of artsy fartsy (is it okay if I say that word here?) types who make a living wage from what they do is minimal. For every actor working on a stage or in a movie, there are at least (AT LEAST) 20 who are looking for a job. That's not a good average. For every musician or recording artist whose CD you just bought, there are again at least 20 who are teaching school or private piano lessons or working as a technical writer (that's what I do) to pay the bills. And then you have to file self-employee taxes in April, and Shannon didn't exaggerate the bump in taxes for the self-employed.

But could you imagine life if we didn't do it?

Me either.

[Laura]

Thanks for the info! I love to write and hope to get some of my stuff published someday, so it's very helpful to see info like this!

[meardaba]

Are you JOKING about #3??? Do you get some tax breaks?

It just doesn't make any sense! In Canada the self-employed are taxed as everyone else, but then give hundreds of ways to get tax breaks - for example:
* Utilities (heat, electricity, water, gas).
* Property taxes.
* Home insurance.
* Mortgage interest (but not principal).
* Condo fees and rent.

Getting taxed an extra 15% doesn't make any sense! What's the logic?

[Jenel]

I love the show Castle but there's a part in the beginning where he talks about the fact that mystery writers make a lot of money (as opposed to psycho killers) my reaction to that is always - "Not if the psycho killer has a good job." :)

Still I think most of us who write would write even if we knew it was never going to make us a dime. Which is good, because I still haven't made a dime writing fiction.

[RDZ]

meardaba:
In America, for every employee, there is the employee's contribution to social security, unemployement, etc. But there is also the employer's contribution to these same funds, collectively known as the "payroll tax", and this amount works out to ~15% of the base pay to the employee. So if an employee earns $1000, the employee see various deductions for taxes, but what doesn't show up on their paystub is that the employer also paid $150 in contributions. That is, for a company to pay an employee $1000 (gross), the company expends $1150.
That's well and good if you're not self-employed; you never knew the money existed in the first place. When you're self-employed, however, you are both the employer and the employee. So you pay the regular employee taxes, but you also now pay the $150 on that $1000. Ergo the "30% tax". There are still many, many deductions available to businesses, but your ability to qualify for them depends greatly on your circumstances. Typically, for example, you can only deduct the portion of your home expenses (utilities) that are used for your business. So if you have a separate office from your house, the entire cost is deductible, but if your office is in your house, only some portion of it is (or might be).

All that said, Shannon, you really should look into the S-corp that someone else mentioned. Disclaimer: I am not an accountant or tax advisor and you need to get one. ;) But I do have an S-corp. The gist is that you still have to pay yourself a reasonable income, and you'll still pay the extra tax on that income, but the S-corp allows the corporate profits (everything above and beyond what you paid yourself) to flow through as capital gains, which is currently taxed at a considerably lower rate (15%, although it may depend on your tax bracket), so you pay a /total/ tax of 15% percent on that income, rather than the 30% you're paying now.

[Rinna-girl]

Oh wow, that was INTERESTING. Awesome as well.

[Rachael Baggett]

Thanks for the insight! I love to write and imagine myself getting published someday. As I was reading this, although I was disheartened by the reality that I will probably never be able to stand alone as a writer--that is if I can get published first--the joy is being able to share something beautiful with other people. I have read a few of your books. My favorites are your young adult novels. I think you are an amazing writer and you have definitely brightened up my day. So along with everyone else, even though we've either bought your books or borrowed them from the library and you're not exactly "rich" I appreciate the insight and time and beauty you share through this amazing talent of yours. And kudos to your husband for his effort in allowing you to be at home and do what you love best--be a mother and a writer.

[Rachael Baggett]

Whoops--"being" a mother and a writer...

[MB]

I'm guessing she wouldn't make enough to have an S Corp be helpful, at least with the posted numbers.

Taxes are a beast, aren't they? I'm an attorney / SAHM, and I've thought about doing wills from home, while I spent time with my kids. But, after state bar fees, malpractice insurance, continuing legal education costs, babysitter, and above all, SE taxes, there would be no point. I would feel terrible charging someone 1000$ to make a will if I'm only going to see a tiny fraction of that amount...

Oh, and I loved your post, and congrats on the twins. I get terrible morning sickness (had a medication pump, zofran, etc.) so I can really relate. I feel for you! I admire you for being able to work at all! You are amazing.

[air yeezy]

I believe this is an ocean of knowledge, i really admire your article in your mind. You let me learn a lot from your blog. I wish you continue to update, i will continue to support your blog.

[Oxygen Plant]

Took me time to read all the comments, but I really enjoyed the article. It proved to be Very helpful to me and I am sure to all the commenters here! It’s always nice when you can not only be informed, but also entertained! I’m sure you had fun writing this article.
.

[Robert]

I don't think this makes anyone mad. I started writing just this year, and just about everyone I've met that lives nearby who writes "fiction novels" makes a darn good living out of it. Like, six figures BEFORE any of the ebook, audio book, foreign rights, etc. are even sold.

Most of the unpublished tell me I'll never be able to make any money. Everyone I know who actually writes as a career choice says I'll be able to make a fabulous living, even though I'm pretty bad. The trick is to "just keep writing" as they say. So I'm writing a couple thousand words per day, and I already feel like I'm getting better than some of my childhood favorites. I guess we'll see.

[Christian Louboutin Pumps]

meeting without fear of harassment, arrest, torture, or death