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What are the tax implications of publishing on KDP?

by |Published

What are the tax implications of publishing on KDP?

As an Amazon KDP author, you are responsible for paying taxes on your earnings. This includes sales tax, income tax, and self-employment taxes. In this blog post, we will discuss the different types of taxes you may owe as a KDP author, how to calculate your taxes, and how to file your taxes.

Types of taxes

As a KDP author, you will likely owe three types of taxes:

  • Sales tax
  • Income tax
  • Self-employment taxes

Let’s take a closer look at each type of tax.

Sales tax

Sales tax is a tax levied on the sale of goods and services. In most states, sales tax is collected by the seller and then remitted to the state government. However, in some states, sellers are required to collect sales tax only on sales made to customers in that state.

As a KDP author, you are responsible for collecting sales tax on your books if you sell them directly to customers in a state that has a sales tax. You can find out if your state has a sales tax by visiting the website of your state’s Department of Revenue.

To collect sales tax, you will need to add the appropriate sales tax rate to the price of your books. You can find the sales tax rate for your state on the website of your state’s Department of Revenue.

You will also need to remit the sales tax you collect to the state government. You can do this by filing a sales tax return with your state’s Department of Revenue.

Income tax

Income tax is a tax levied on your personal income. As a KDP author, you will need to report your KDP earnings as income on your personal income tax return.

The amount of income tax you owe will depend on your filing status and your total income. You can find out how much income tax you owe by using the IRS’s income tax withholding calculator.

You will need to file your income tax return with the IRS by April 15th of each year. You can file your income tax return online, by mail, or by phone.

Self-employment taxes

Self-employment taxes are a type of social security and Medicare taxes that are levied on self-employed individuals. As a KDP author, you are considered self-employed and will need to pay self-employment taxes on your KDP earnings.

The amount of self-employment taxes you owe will depend on your net earnings from self-employment. You can find out how much self-employment taxes you owe by using the IRS’s self-employment tax calculator.

You will need to pay self-employment taxes quarterly. You can pay self-employment taxes online, by mail, or by phone.

Calculating your taxes

To calculate your taxes as a KDP author, you will need to add up all of your KDP earnings for the year. You will then need to subtract any expenses that you can deduct from your KDP earnings. These expenses can include things like the cost of writing and editing your books, the cost of marketing your books, and the cost of your business equipment.

Once you have calculated your net earnings from self-employment, you can use the IRS’s income tax withholding calculator to figure out how much income tax you owe. You can also use the IRS’s self-employment tax calculator to figure out how much self-employment taxes you owe.

Filing your taxes

You will need to file your income tax return with the IRS by April 15th of each year. You can file your income tax return online, by mail, or by phone.

To file your income tax return, you will need to gather the following information:

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