Back in February, PublishingTrends.com featured an article titled “The Skills Publishers Need: A Self Evaluation.  (http://www.publishingtrends.com/2011/02/the-skills-publishers-need-a-self-evaluation/)  I strongly encourage you to read the entire article. It featured skill sets that publishers feel they need in order to survive these rapidly changing times.  One of those listed was:

“You need a solid business background, you can’t think that your job ends at 5:00, and you must have a healthy amount of skepticism about what people are calling ‘the next big thing.’”

What caught my attention was that this is not A skill set; it is three of them. And all three apply to writers as well as publishers.  Let’s take a look.

• solid business background
  A degree in accounting is not necessary but a basic understanding of bookkeeping is.  Keep track of your business transactions in a business-like manner. If unsure, take a quick course through your local high school or community college. Bookkeeping software can be helpful but a simple spreadsheet will work just fine.
  

• Job ends at 5:00
  Your job definitely will not end at 5:00. As the owner of your business, your job never ends. If you are not working on your next article or manuscript, you should be marketing. For those working full time, do your best to shoehorn writing and marketing activities into your schedule.  

• Next trend
  Finally, you can’t worry about “the next big thing.” No one knows what that is, no matter how hide they try to place a good bet. Even Harry Potter received twelve rejections. Write what you want to write, make it the best writing you can, and then help your work find its market.

The skill sets publishers see for themselves often apply to writers. Every writer must also manage his or her business, now more than ever before. 

Believe it or not, many writers are reaching an age where they will have to make decisions about whether or not start taking Social Security.  Some have actually reached full retirement age and others are financially in need of the extra funds while still others want to get their money out of the system as soon as possible.

When and how you take Social Security is a highly personal issue, dependent on whether or not you are still employed, what investment income you may have, and other numerous criteria.  For that reason, your decision is best made with the help of your tax advisor.

I bring this issue to your attention because a writer friend of mine recently ran afoul of Social Security because she forgot to include the income from her writing when making her decisions about Social Security.  How much she made from her “hobby” was not part of her thought process and now I understand her “hobby” is enjoying a very good year.  This will complicate her tax situation.

There is a point when you can earn as much as you like and still collect Social Security benefits. Until you reach it, keep in mind Social Security earning limitations as you plan your retirement and be sure to factor in your writing income.  Yes - royalties are income.  The following is copied from the SSA Web site: Royalties earned in connection with publication of the individual's work or honoraria received for services rendered.

I do not reference specifics here because things are constantly changing - both the laws and your personal financial situation.  Be sure to discuss this with a knowledgeable tax advisor and do not try to navigate these waters without assistance.  Tax law (federal and state) and the rules governing Social Security are too complicated for us mere mortals. 

One of the questions I receive most frequently is how long should records be retained.  It’s a good question. We often have too much stuff and rather than get rid of the shoes we don’t like or the pants that no longer fit, we try first to reorganize by getting rid of excess paper.

Paper seems to have biological properties. Put two pieces together on a table and soon you have ten, which then mate and create twenty more. Nothing multiplies like paper, not even rabbits. Paper also attracts dust. Have you noticed how the coffee table is always spotlessly clean until you pile paper onto it?

I tend to clear out the paper clutter in the spring. It became part of my spring cleaning routine as a matter of course. In addition to connecting to the post-winter cleaning ritual, spring is also post-tax season and the records won’t be needed again - we hope.  So it is time to put them away.  And when we attempt to put documents away, we discover that we have piles of records from previous years.

My accounting firm recommends that tax returns and the documents supporting them be retained indefinitely. This is not in anticipation of an audit. It is because the laws constantly change and you may need a piece of information from earlier years to take advantage of something currently available.   This is particularly true for real estate and investment transactions.

So what can you throw away?  Anything that doesn’t pertain to your tax returns or company. That will vary from individual to individual. Here are some links to guide you. 

• http://www.irs.gov/businesses/small/article/0,,id=98513,00.html
• http://www.irs.gov/publications/p552/ar02.html
• http://bestbizpractices.org/2009/09/16/record-retention-requirements/

Remember that, thanks to digital technology, you can store copies of your records on digital media. A flash drive or CD takes a lot less space than a file folder.  If you have access to a scanner, this may solve your problem.

In addition, when in doubt, double check with your tax adviser. He or she should be an expert on the topic.

Happy spring cleaning.

When I titled this post “quick change,” I did not mean the speed with which the sales associate at Barnes and Noble gives you money back from your twenty dollar bill.  I’m talking about rapid alterations in our lives and our plans. This can be brought about by financial, technological, or personal events.

As you are aware, if you follow this blog, my family recently suffered some health issues and that has meant sporadic postings here. But the biggest recent change was that my publisher dropped me.  This was expected and was in my business plan - for a year from now.  Instead, the publishers’ notification that I would no longer be part of their catalog after thirty days was a shock and left me scrambling.

I had to quickly contact my graphic artist, do any necessary editing (there were a lot of typos in Greased Wheels), and arrange for publication through another source.  Currently, my books are not available in print; however I am pleased to say that all three of my mysteries will be released in print this year through a new publisher. Change can be good: I am thrilled with the new cover for Greased Wheels.  If you want a sneak peek, you can see it on Smashwords. 

Why am I telling you this? To illustrate that even the best plans are subject to change, sometimes with no warning. It is a good idea to have a Plan B and maybe even a Plan C.

When you do your year-end review, give some thought to various scenarios that will address points in your plan where you predict change.  As we saw with e-readers, one thing can create an entirely new paradigm, seemingly overnight.  Digital publishing was expected but the immediate and nearly instant impact of e-readers was not.  

Change can be good.  It is even better if we can anticipate it and be prepared.

In Dollars and Sense for Writers, I advise writers to think about why they should attend or not attend a conference.  What will they get out of it?  Is it worth the price of admission?  A checklist for evaluating the conference is included.

In the book, I make the point that attending a conference is important to me because it recharges my creative batteries.  Talking to fellow writers, hearing about their successes or failures, spurs me on.   

Make no mistake - writing is hard work.  You may feel that you aren’t getting anywhere and that you will never succeed.  Plus writing can be solitary work.  Few of us are in an office surrounded by coworkers.  We have to go it alone and we run down.  Plot points hang us up, deadlines are missed, blank pages never fill up. 

It is not easy to keep going without some support and encouragement from others who face the same challenges and distractions. One of the opportunities we have to recharge our drained creative batteries is meeting with colleagues.  We find them at a conference. If you are writing, I strongly encourage you to get out and meet with others. 

 I have never attended a conference that did not benefit me in some way. That is because I had a specific goal in mind and attended the conference with a purpose. One year my goal was to meet five new people.  It was a great goal that continues to pay dividends. One I met continues to be a writing buddy.

Most years, I am limited to one conference.  Love is Murder is held the first week of February in Chicago.  It’s a natural for me because it is local.  So even though I don’t have much of a creative life during tax season, I make a point to get to LIM.

Thank you to the board of directors and volunteers that make Love is Murder an event I look forward to every year.  It was great to see everyone. 

I look forward to 2012!

In February, I wrote a blog titled 50 Tax Men.  Thanks to a recent ruling in Texas, I want to address that issue again.

It’s all about Amazon, a company known for dodging the sales tax bullet.  The issue is should Amazon charge sales tax on all its sales whether or not it has a physical location (a warehouse, sales office, etc) in the state?  Amazon has four warehouses and does collect sales tax in those states.  However, that leaves 46 states that are not getting a piece of Amazon’s very large pie.  Most states, some near bankruptcy, desperately need revenue.  Amazon sales seem like a great place to get it.

Enter Texas.  It assessed Amazon $269 million in sales taxes owed.  Amazon, in its SEC filings, lists the potential for additional taxes owed as a possible investment risk.  Flash - this is not confined to the United States.  European countries are also interested in obtaining taxes from Amazon sales.  (Get more detail here: http://online.wsj.com/article/SB10001424052702304354104575568512331020710.html and here: http://www.publishersweekly.com/pw/by-topic/industry-news/bookselling/article/44933-texas-says-amazon-owes-269-million-in-taxes.html )

I bring this to your attention because there is more to the issue than money for the state coffers.  By avoiding sales tax, Amazon is selling its product for substantially less than local retailers.  For example, a purchase made at an independent bookstore in Chicago is automatically 9.75 percent more than the same purchase made on Amazon due to sales tax.  This is an unfair advantage and has given rise to a number of states considering e-fairness laws, Illinois among them.

This matter will not go away.  Eventually, Amazon will lose this battle.  If you currently act as an online retailer and ship your work to your readers in other states, be prepared to collect and remit sales tax or consider using a distributor who will handle the taxes for you.  Involving a third party may reduce your profit but keeping the tax man happy is a key part of running your business.

Does all this affect you or the way you manage your business?  Before you make any decisions, discuss this with your tax professional.  Taxation on the state level is complicated by fifty different sets of rules.  Do not try to navigate this alone.

Due to a family health issue, I have not been able to post to this blog for a while.  I will return as soon as I can.  Thank you to all my fans and friends.  See you soon.

In Dollars and Sense for Writers, I devote several chapters to working with the numbers your writing business generates.  The primary reasons are: the information will be needed for tax return preparation and for year-end analysis of our business.

At the end of Chapter Five, I address recordkeeping. With the many changes to tax law (particularly state law), it is critically important to maintain good records.  All our income and expenses should be documented.  In addition, in Chapter Ten, I recommend writers evaluate the business year with an eye toward making improvements.

Generally speaking, neither your accountant nor the IRS is concerned with how you keep your records.  They only care that the records are kept and are accessible.  I know writers who list their income or expenses on green columnar paper and the receipts go into a shoebox. There are others who use software like QuickBooks or Money and scan their receipts into a computer file.  These methods are at opposite ends of the technological spectrum but they work for the writers who use them.  The key is to be consistent and to do what needs to be done in order to have records that work for you.  I recommend you use some type of computer software. Even something as straightforward as a spreadsheet can help you generate reports for tax prep or business analysis.

Remember to keep track of your business mileage.  When you go to meetings, promotional appearances, and interviews, the mileage for the trip is a deductible expense.  At fifty cents or more per mile, that can add up.  I know several writers who missed an important tax deduction because they didn’t make note of all the miles they traveled for business. 

Part of managing any business is keeping good records.  It may seem like a pain in the butt at the time but you’ll be glad when you start wondering whether or not your writing efforts are producing results.  And you’ll be very happy with your recordkeeping labors when tax time rolls around.

In Salon.com, http://www.salon.com/books/laura_miller/2010/06/22/slush?source=newsletter, Laura Miller bemoans the advent of subsidy self-publishing and asks how the reader will find something worthwhile in the pile of books now being produced. 

She reminds us that 700,000 books get ISBNs every year.  That whopping number includes text books, non-fiction, fiction, and new releases of old editions. What she really addresses in her article is the roughly 46,000 fiction titles produced each year.  That’s a lot of books but significantly less than 700,000. 

If readers attempted to wade through all those titles unaided, the results would undoubtedly be as she predicted. They would get tainted by some of the poorly written material that is out there.  In her analysis, however, she overlooks the word-of-mouth factor.  It is the recommendations or warnings from countless book clubs, backyard barbecues, and family parties that help us find buried treasure and avoid books that should have stayed in a writer's imagination. Word-of-mouth is the reason Iron Chef America exits.  There was a time when no one had heard of Pixar or J. K. Rowling. 

The Internet and social networking have created a marketplace that will weed out much of the garbage and lift up some wonderful finds. Today’s readers have no illusions about finishing something they dislike.  They don’t waste time wading through a bad book.  If they don’t like it, they put it aside and pick up another.  Whether today’s books are whipping cream or sour milk has less to do with how they are printed than with what readers actually think of them.   

As you read the dire predictions about the demise of the traditional publishing model, keep in mind that change is often difficult. In the long run, it won’t matter at all whether a work appears on paper or in pixels. Its success or failure will depend entirely on what people think of it. That is the reason you should make your work the best it can be.

An interview with Anne Lamott, author of both fiction and non-fiction including "Imperfect Birds," appeared in the June 8 issue of the Chicago Tribune.  In it she said, “With a novel, it’s a very, very solid year getting an unbelievably bad first draft together.” (Anne Lamott Interview). She validated something writers know but major publishers refuse to acknowledge – it takes longer than seven months to write a book.

I know several writers who committed to publishing contracts that required new books every seven to nine months. Lamott joins Lawrence Block and several others who agree that is an unrealistic goal.

There are several factors every writer, agent, and publisher should consider when setting submission deadlines.

• First, the writer has a life. Whether that includes children, aging parents, or a spouse, the writer has obligations other than to a publisher.  It is from that life that the writer draws inspiration. Cut it off and the writer loses touch with her world. Loss of that connection will affect the end product.
  
• Second, if the writer does nothing but write, the writer is not out promoting existing work. As talented as we all are, we cannot defy the laws of physics and be in two places at one time.
  
• Third, good stories are worth waiting for. One only has to look to the Harry Potter series to see that readers are willing to wait for something they want. If the story and the storytelling are good enough, readers will still be there when the next title comes out.
  
• Finally, like most readers, I enjoy the work of more than one author. I do not enjoy a steady diet of only one writer's work. If I have chocolate cake after every meal, I quickly lose interest in chocolate cake. Publishers run the risk of alienating readers and reducing sales if they don’t give the fans time to read the current title and build anticipation for the next.
  

Particularly in hard economic times, readers are less willing to pay for less than the best. Just back from a conference, several writers discussed the diminishing quality of the work produced by some bestselling writers. In the same sentence, they commented that sales are down. Interesting that neither the writers nor their publishers connect the two.

So three cheers for Anne Lamott and other A-list authors who have the courage to speak out about how long it takes to create a good book.  As a writer, I want to be proud of my product, taking time to hone and improve it. As a reader, I’m happy to wait for something that is really worth my time and my money.