publishers having pricing power, since they have to compete with so many e-books that are priced much more competitively—that is, priced in the sweet spot.
As the book world moves further into the digital age, I suspect that high overhead will be increasingly problematic for publishers if it necessitates overpricing their stock in a market where a lot of talented, wellproduced e-books are available to readers through the exact same distribution channels at lower prices. As an additional issue, overhead is a key reason that a publisher keeps such a large share of an author’s earnings, and many authors are increasingly dissatisfied with that math in an era when they have so many more options than they used to for reaching readers. If reducing overhead would enable publishers to lower e-book prices and/or offer better fiscal terms to writers, then it may be a path they can’t afford not to consider.
However, as Lucas says about publishers in The Search For Survival, “It is hard to figure out a new business model while there is still life in the old one,” even though he predicts the end is in sight for the current model.
Laura Resnick wishes that Penguin Random House would give in to sense, reason, and fair play by agreeing to call itself Random Penguin.
Writing is Taxing
Continued from page 15 business for years, though all earnings had been reported in the spouse’s name only on a single Schedule C. Only their spouses received credit toward Social Security, and the clients found themselves with no wages credited toward Social Security benefits. Such a situation can be problematic when retirement time comes, especially in the event of divorce. To determine how the allocation of net earnings would affect you and your spouse, it is recommended that you contact your local Social Security Office for information on how benefits are computed.
If the net income of the writing business exceeds the annual wage base limit, the couple should also consider whether the funds that would be needed to pay the additional OASDI taxes could be put to better use, such as being invested in a SEP-IRA.
Diane Kelly is a retired CPA/tax attorney and the author of the humorous Death and Taxes romantic mystery series and a self-published romantic comedy.