On Thu, 02 Apr 2009 15:52:55 -0700, Darren New wrote:

> Jim Henderson wrote:
>> I don't know; our local community organization recently submitted
>> paperwork to reinstate their non-profit status as a 503(c)(4)
>> non-profit, and I don't know that there was any cost.
> 
> Dunno. Even setting up an maintaining any corporation can be expensive.
> At least in the USA.  California has $800/year tax, a registration fee
> every year, and if you do business somewhere else you have to register
> there and pay for a resident agent. You undoubtedly have to maintain a
> separate bank account and file taxes for the thing, which is time and
> energy better spent improving POV or otherwise getting on with a life.

Corporation != Non-Profit Organization, though.  I'm talking like a 503
(c) organization.

>>>> But if the contributions are low enough, they're not taxable anyways.
>>>> I know this is the case in the US - income < $600 doesn't have to be
>>>> reported (I collected about $50 last year in book royalties).
>>> Note that "doesn't need to be reported" != "not taxable".
>> 
>> A minor distinction, since the low income isn't required to be reported
>> even - but even if it is reported, it in and of itself isn't taxed.
> 
> Depends on how much you make. If you get 3000 payments of $500 each, you
> certainly better be reporting them yourself.

The $600 value is per payer, if you get 3000 payments of $500 each from a 
publisher, they're required to report the income, as are you.

But if you publish 10 different books, each through a different 
publisher, and only make $500 from each one, then it's not reportable 
income and you don't owe taxes on it.  At least that's my understanding.

> And if you're actually a corporation, you certainly have to report all
> your payments even if they didn't get reported.

But again, corporation != non-profit.

>> I went through this whole thing when my first book was published,
>> because the advance was taxable but the taxes weren't taken off the
>> top.  :-)
> 
> Yep. I've run a number of small companies, and the reporting and such is
> quite a mess.

Then you're probably in a better position to comment than me. ;-)  I've 
only taken the payments, but what I've written is my understanding based 
on my experiences.

>> I would say that the "rainy day" fund makes the most sense to me.
> 
> Based on what I know of US laws, putting together a trust is probably
> the easiest and cheapest way to go about it. Of course, much of the POV
> team seems to be in european countries, so I have no idea. IANAL, IANAA,
> etc.

That might be the case, yes.  And same disclaimers apply here to me. :-)

Jim

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