US Tax Piggy and me
US Tax Piggy (I’m off camera)
This week I learnt that the Australian treaty with the US is not as good as the UK’s, Canada’s or Ireland’s. And no doubt not as good as treaties held by a whole bunch of other countries! If you’re an Australian citizen, like me, the best you can hope for when publishing and selling in the US as a ‘foreign entity’ (actually, I quite like that term, spooky and MiB) is a five per cent US tax on your earnings. Everybody else seems to be getting zero per cent. Confounded curses! These are the kind of not-so-exciting things one learns on the road to indie-publishing.
(What the hell’s that to do with a piggy? Well, to tell you the truth, not much. But isn’t it a great picture?)
I shouldn’t grumble. Things could be a whole lot worse. If you don’t take on the US tax system at all, in all their fine red tapery, the US government will swoop in (like a flying pig) and slap you with a much higher tax rate – 30 per cent!
But the marvellous support offered between indie writers the world over has kicked in and saved the day – at least as far as the horrific 30 per cent is concerned. (They haven’t been able to do anything about Australia’s less-than-great treaty.) If, like me, you’ve been fretting about the US tax system (sad I know), then fret no more. Or at least, fret a little less. For there is much useful advice to be had from David Gaughran’s guest post on Catherine Howard’s website. David Gaughran and Catherine Howard are two Irish Indie writers who have been there, done that, and I’m following their instructions to the letter.
And so far, so good.
For there I was, midnight thye other night, after carefully taking in David Gaughran’s advice, on a call-wait to the infamous IRS (Internal Revenue Service) in Philadelphia, to obtain my Employee Identification Number or EIN as they so catchily call it. I had to sit through roughly thirty minutes of muzak interspersed with a recorded voice informing me of what I already knew extremely well, that I was still waiting. (I so hope my Optus landline contract includes free, or at least cheaper, international calls. Mustn’t tell my wife.)
When I finally got through, it took less than three minutes. The IRS lady on the other end spoke to me in a tone that was a mixture of impatience and boredom, asking me questions that were laced with mystifying business terms. To me anyway. I did my best to answer with a pretence of confidence. But then, wonder of wonders, suddenly she said, ‘Do you have a pen ready?’
And she gave me my very own US tax file number.
This is something that I know from other bloggers can take months and months to obtain via other routes. It’s almost worth tattooing on my forearm. (Nah, not really.)
The next step in the journey of this ‘foreign entity’ toward indie-publishing is a fight with a pernickety-looking tax form known as a w8-BEN. Which, in my head, I must stop pronouncing as ‘Wait Ben’. I promise I won’t write a whole blog post about it.
