Needless to say, there are few cases in which you may find yourself needing legal protection. Are you swiping lyrics from a well-known band? Don't do that because you'll definitely need legal protection. Looking for a way to riff on 50 Shades with your own 40 Shades of Pink? Talk to a lawyer.
Strangely enough, most authors don't think of themselves as a brand or even a recognizable "face" product. Yet here we are, selling our thoughts and our creations just like any other company. Let that sink in for a minute. You and your writing are a business. Why not become one officially? Let's take a look at what an LLC can do for you and your creations.
When you file for an LLC (and you probably will after reading this), you're looking for security. It's not just about you or your finances, it's about your creations. An LLC backing who you are as a creator is one of the best ways to protect your creative work. Not only are you registering it as your own via copyright protections and patents (if they apply), but your business LLC can essentially be used as a third-party to verify the whens and hows of your creative accomplishments.
Basically, your LLC's stakes in your creative properties will be confirming when, where, and how you've made these stories or characters come to life. Though as it stands in today's copyright laws, as soon as you put pen to paper and create the creation it then belongs to you if there is the slightest discrepancy your LLC can back you up.
But it's not all about your creations, either. It's about your safety and sanctum. Your home is your palace, even if it's a tiny little apartment in a lousy area of town. You should feel comfortable there.
Therefore, instead of having royalty checks delivered to your home or having to publicize who you are, you can use the LLC as a barrier to the world. You come away with a second way to be contacted, a different matter in which you can be served any paperwork, and a way to protect your belongings in case of any lawsuit or issue in the future.
Obviously, we hope these don't happen to you. But there's a well-formed piece of advice that most authors know: every story has already been told. If your tale comes too close to someone else's, even if you are unaware of that story, you may end up in court defending yourself. Better that your LLC takes that hit than you, personally.
Oh, taxes. It's the bane of every author's life. No matter how well we do or how poorly we do during the fiscal year, you still have to pay the taxman. And it hurts. That self-employment tax burns you every year. No one loves a 1099 form.
LLCs give you a wide variety of different ways to assert yourself to the IRS. Filing married, filing individual, filing as a business; there are so many different ways to do it that we advise looking into an LLC just for this reason. If you are receiving royalties rather than selling books at book fairs or to libraries or perhaps freelancing, each of these mean different taxation classes. They all come with different levels of income required, different types of taxation rules, and different necessities to file to stay within the legal spectrum.
Since it is impossible for us to know precisely what type of author you are and where you're selling your creations, we recommend considering this throughout our library of information on LLCs. However, for the most part, authors will see thousands in tax fees disappear for the following tax fiscal year.
If you want to keep yourself in the clear and keep your personal life an extra step away from your professional one, an LLC is an absolute must. You never know when your next work will catapult you to the sky and leave you wrung out to dry in front of the rest of the world. If you're going for the gold, it's better to create an LLC to protect you. Remember, an LLC doesn't have to be fancy. It can just be your name + author services. That's enough to keep yourself in the black and your books on the rack.
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