Death, Taxes, And Litigation

Death, Taxes, and Litigation. Despite what some might think, one cannot avoid any of them, but one can mitigate some of the perils.

I have or manage four LLCs, and I am thinking of forming a fifth. An LLC does not cost very much to set up through an attorney. Once it is set up, one applies for an EIN (Employer Identification Number) from the IRS for use instead of a social security number, and one applies to ones State's Licensing And Regulatory Affairs division for a business Id and Password. Thereafter, one files an annual report online, which is quick and easy, and one pays a modest fee of around $25 per LLC.

Of course, the IRS also requires that in January, one files 1099-MISC and 1099-NEC and if applicable 1099-INT, if one has paid interest, or paid a non-employee who is not an Inc, or paid a lawyer.

I've no idea why the IRS is under the apparent impression that lawyers are dishonest. It seems rather Shakespearian!

Writing is a business, so is land lording, farming, running a consultancy, ghost-writing, editing other writers' work, web-mistressing, and so forth.

For the rare few writers who reliably earn half a million a year, year in, year out, they might consult a CPA about forming an S-Corp for the tax benefits of officially employing themselves. For the rest of us, the additional book keeping and red-tape wrangling might not be worth it.

Some advise, that if your writing ventures include separate activities, such as self publishing, taking on work for hire, paid public speaking, ghost-writing, it might make sense to compartmentalize the different businesses into different LLCs.

A Limited Liability Corporation cannot shield you -as an individual- from being sued for copyright infringement or libel, but it can be useful if your work eggs are kept in different baskets.

For other risks, consult a good insurance professional, and if you don't have a qualified agent, have an attorney (or a guild that provides such services, like Authors Guild) look over your contracts to be sure that the party hiring or employing your services indemnifies you and takes on as much of the insurance obligations as possible.

As for the Death bit, your copyrights last for your lifetime, and then for another 70 years or so. Therefore, you want to state in your Will who is to benefit from your businesses, works, and copyrights.

All the best,

Rowena Cherry