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On US Tax Withholding

If you’re e-publishing with an American company (Smashwords, Amazon, or whatever) and you don’t live in the US, then you need to know this.

The IRS will withhold 30% of the profit of your ebooks. Canada and the UK (and maybe other countries as well) have a special tax treaty with the US. So you can get around the withholding tax, but you need to get an ITIN (Individual Taxpayer Identification Number) or an EIN (Employer Identification Number).

You probably don’t have a business license so you may think you need the first one. All the blog posts I’ve read on line will tell you it takes at least a month to get an ITIN because you have to fill out lots of forms and go through the mail. There is an easier way.

Call the IRS at 1 267 941 1099 and tell them you are self-publishing as a sole proprietor. It took me about half an hour on hold and then about ten minutes talking to a real human. The person I spoke to referred me to an S-4 form which I could get from but he filled it out for me over the phone and then gave me my number right away.

When you get your EIN number, there is one more step. Fill in a W8-ben which you can download from the IRS site mentioned above. Then mail it to each vendor where you sell books in the US. Check the website of the vendor for the latest address.

Get all the money that’s coming to you and don’t pay taxes twice.

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