The U.S. Tax Treaty for Writers and Illustrators

Miranda Hardy is doing a cover release this week for her new picture book, Wacky Waddles, and generously offered to share her knowledge on the U.S. tax rate for writers and authors who reside outside the U.S, and for those who are doing a joint venture with a non U.S resident. This is very important information. Thanks, Miranda. :)

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Thank you Stina for allowing me to take over your blog today. I hope that I may bring some knowledge to those who plan on doing business in the U.S., but may reside elsewhere.

When I was paired with an illustrator on an anthology project, I had no clue where Maldives was located, but I knew I needed to work with Rimi no matter the consequences. Working with others who reside outside of the U.S. requires knowledge of certain tax laws.

Are you thinking of publishing in the U.S., but live in another country? Maybe you are working with someone else in another country on a collaboration, perhaps even a business partnership? Regardless of whether you plan on self-publishing or going the traditional route, if your work will be published in the U.S., you’ll need to understand certain aspects of our tax laws.

The U.S. government requires companies to withhold 30% of royalties made in the U.S. and paid to entities residing in other countries…unless the U.S. has a tax treaty with your country.

Click HERE for a list of the countries in which the U.S. has treaties established.

So, what do you do if you’re entitled to an exemption or reduction in the U.S. tax rate?

1.)    You need to apply for an ITIN (Individual Tax identification Number) or EIN (Employer Identification Number) with the U.S. Internal Revenue Service. Applying for an ITIN is a long process, involving sending in original documentation for identification purposes. Click HERE for the instructions. 

Applying for an EIN is simpler. International applicants call (267) 941-1099. They will give you the EIN instantly over the phone. Hours are 7:00AM – 10:00PM Eastern Time. 

What’s the difference between the ITIN and the EIN? EIN’s are used by employers, sole proprietors, corporations, partnerships, non-profit associations, trusts, estates of descendants, government agencies, certain individuals, and other business entities. Since I am a writer, I deduct writing expenses, as well as keep track of my writing income separately; therefore, I’m a sole proprietor.  

2.)    Fill out a W-8BEN and send it to the company you may be dealing with (Amazon, your publishing company, etc.). Make sure you send the original through the mail to the entity you will be receiving the monies from. This form can be found HERE.  

That’s it! You can always, for your reading pleasure, examine the U.S. foreign withholding procedures for yourself with the IRS Publication 515. It’s 64 pages of complicated forms and acronyms.

Although my background is in accounting, this post is for information purposes only, and does not constitute professional legal tax advice. The U.S. Internal Revenue Service updates publications often, and tax policies are subject to change. 

Miranda Hardy
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Miranda Hardy writes children's literature to keep the voices in her head appeased. When she's not in her fantasy world, she's canoeing in alligator infested waters or rescuing homeless animals. She resides in south Florida with her two wonderful children, and too many animals to mention.

Rimi Rasheed
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Rimi Rasheed is a professional in primary education yet follows a passion in digital illustrating, and much of her work is focused on children. She is well known for her colourful creations of lovable characters, most of which can be found on her blog. She lives in Maldives with her husband and two children.

Wacky Waddles is a rhyming picture book for young readers. Take the journey with Wacky Waddles as he explores his new home.

Paperback available through Amazon.
Ebook available through Amazon and Barnes & Noble.