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Mastering the Amazon KDP Tax Interview - Everything you need to know

Mastering the Amazon KDP Tax Interview - Everything you need to know

And here we are. A new starry-eyed author publishing our book on Amazon.

We had stumbled upon the the Amazon KDP website after our dad recommended we check it out. But what now? What does one do after entering your email ID into the vast troughs of Amazon's online customer database? Do we do a magic publishing-jig and hope that the God of Publishing smiles upon us? Do we sacrifice one of our dearest paperback-companions as a sign that the Kindle-Deity can trust us?

Once the dust has settled on your brand-new Amazon KDP account you might be wondering why you are now faced by a message from Amazon demanding you spend precious time completing an online tax interview? Why should we? Surely the time taken to complete your manuscript is enough?

No dear author - Amazon is just getting started. So whip out your local income tax number and be prepared to show Amazon that this author knows their shit.

 

Amazon KDP Tax Interview

 

Why?

Amazon needs to know who will honour the taxes that need to be paid from the sale of each (e)book. Obviously, each country will expect a different tax rate be paid by a self-publishing author. For example, if the author publishes as an individual then the personal income tax table will kick in. However, if the author plans to publish multiple-masterpieces then they might choose to form a publishing business that they can use to sell their material. This would also mean the author pays (small) business tax instead of being taxed as an individual.

So up until Amazon knows where you are from it withholds the default of 30% of your royalties. Yeah, I feel your pain :(

This whole interview is the process of you cosying up to Amazon in the hope that after a couple of drinks (and a few forms) they loosen up and release the full bounty. This might mean for example that you receive the full 70% of your eBook list-price. So, you can see it is worth the effort.

 

Who?

Authors in the US will always have an easier time completing the interview. It's kinda designed under the assumption that you are from the US. Or at least the first-world. Authors living under Trump's umbrella will sail through the interview having consumed naught but half a cup of coffee. No my friends, this article (and kick ass video!) have special meaning for those who might be utilsing the Amazon KDP publishing platform from outside of the US.

You see Amazon is one of the few eBook platforms allowing authors (living outside the US) to avoid going through the process of applying for the ever-so-troublesome International-Tax-Identification-Number (ITIN). By completing the tax interview (correctly) you are achieving what the ITIN process also promises: All royalties paid out to you, the author.

Smashwords for example (at the time of writing this post) requires that the author has an ITIN number. If they don't, kiss 30% of your royalties goodbye.

ITIN-what?

That's right, if you live outside the US and choose to ignore my freely-given advice on the Amazon Tax Interview process  the only alternative would be that you have to have apply for the dreaded-ITIN. I say dreaded as I have yet to hear from an author who describes the process as an easy one. That's right, if you choose to go the route of applying for your own ITIN, be prepared to grab the lube and wait in line.

How to apply for an ITIN for Amazon KDP.

 (South African authors looking to apply for an ITIN number - Here is a post from our darling author poster-child Rachel Morgan.)

 

Off to YouTube we go

Right, so you know what the Tax Interview is for. You also know why it's important to complete it correctly. So to help you achieve awesomeness please watch the YouTube video below that will walk you through each page of the Amazon Tax Interview.

 


 

 

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