Sunday, January 22, 2012

IRS changes for 2012 and your PayPal account

Do you get payments from PayPal? If you do, the IRS has your number. That number being the amount of money you received from PayPal. What does this mean for you? If you are not subject to US taxes, it doesn't mean anything. If you do have to fill out a US federal tax return, then this means that the US government knows how much you received from PayPal and may be upset if you don't pay your taxes.

Who has to pay US taxes?
For individuals, if you are not a US citizen and did not live or conduct business in the US, then you don't pay US taxes, even if you received income from the US (either directly or through a third party payment processor like PayPal). The situation is similar for companies. If your company has no presence in the US, it typically is not subject to US taxes. If you don't fit into these categories, then you have to pay attention to US tax laws and regulations.

What's changed for 2011?
Starting in 2011, third-party payment providers like PayPal (as well as credit and debit card payment processors) were required to report to the IRS payments made to individuals and businesses.

How is this different from before?
The only difference is in who reports payments to the IRS. For example, if you ran a web site and had some kind of affiliate or advertising relationship with some company, and that company paid you using PayPal, that company may have been required to send you an IRS form (typically a 1099-MISC form) that summarized your total received payments from the previous year. Now, that company doesn't have to send you any IRS summary form, PayPal would do that now.

In previous years, the company that sent you payment using PayPal was typically required to both report those payments to the IRS, and send you a 1099 form if the total payments in the previous year was more than $600. Now, that company is no longer required to send that information to you or to the IRS.

How does this affect you?
There will be no change if you or your business are not subject to US taxes. For everyone else, there will be no change if you have always followed appropriate IRS regulations for reporting income and expenses. If you are subject to US taxes, and have not reported income in the past, then the only change is that PayPal will tell the IRS how much you were sent, and it will be more likely that you will get penalized by the IRS for not reporting your income.

What do you have to do?
If you are subject to the new reporting requirements, your payment processor (PayPal, Google Checkout, etc.) will contact you and request information such as your name and tax identification number. If you don't provide this information, that processor may withhold some of your payment for tax purposes. If you do provided all the required information, you may be sent an IRS form 1099-K that summarizes your payments that you received from that processor.

How will this affect your taxes?
If you had done proper accounting and reporting of your income and expenses before, then this new reporting requirement won't change your taxes at all. If you have not been reporting your income in the past, then you may have to pay more taxes (or even fines for under reporting income). If you have not taken the time to treat your activity as a business, now would be a good time to start. If you are self employed or run a small business, you may want to check out some of the appropriate IRS resources. If you are in a large business and are responsible for dealing with accounting and tax issues, then you should review your procedures to make sure that this change in the IRS rules has been addressed.

Other Resources
IRS Third Party Reporting Information Center
IRS Small Business and Self-Employed Tax Center

Disclaimer: This article contains general information about US tax laws and regulations and does not constitute legal, tax, or professional advice. If you have questions about these issues, please seek out the services of appropriate professionals or information from authoritative sources.

Monday, January 2, 2012

How to become an ebook publisher without spending money

Late last year, I published an article about how to read Kindle Books without buying a Kindle. The article was written with a larger goal in mind, to put you on a path to becoming an ebook publisher, creating books and other documents that can be read on Kindles, iPads, iPhones, personal computers, and just about any other ebook reader or personal computing device.

If one or more of the following applies to you, then this article has a lot to offer to you:
  • You have written a traditional book, and are thinking about publishing it as an ebook.

  • You are thinking about publishing a new book, and think that starting with an ebook would be quicker and cheaper.

  • You have a web site, blog, or podcast and you want to offer your audience downloadable documents.

  • Kindles and ebooks are the new hot thing and you want to get in on the action.
All of these things were true for me, and I certainly had the desire to get something out the door and into the hands of an audience. However, I had a couple of obstacles between me and an ebook:
  1. I barely knew anything about ebooks other than they existed.

  2. I didn't feel like spending a lot of time, or much money, learning how to publish an ebook
I'll spare you the middle of the story and go straight to the end. If you want to learn about the ebook production process, even if you don't want to write an ebook yourself, go to and sign up for their free service. They will take you by the hand and show you how to get your book properly formatted, and ready for sale.

If you take the next step and actually create a book (it doesn't have to be either very good or very long, so go ahead and put something together), give lots of copies to friends, relatives, or anyone else who will give you some feedback about it.

After you get some feedback and edit or even rewrite sections of the book, go ahead and put it on sale. If you use the Smashwords distribution system, you can even give it away for free, and have Smashwords track your downloads. The great thing about Smashwords is that they turn your book into a version suitable for every kind of ebook reader. They will even turn it into a PDF document.

At AirSafe Media, I took one previously published book and turned it into an ebook, and created two other ebooks in a matter of days. One was based on existing online articles, and a second based on a training manual I made for another purpose. All three are available for free download, and I made them available as a PDF file and in versions that could be read in a Kindle, iPad, or in an ereader or smartphone.

If you want to go a step further, after you become familiar with the Smashwords process for creating ebooks, check out the the free book Publish on Amazon Kindle with Kindle Direct Publishing from Amazon. If you have something is good enough to sell, go ahead and try Amazon. The worst thing that could happen is that you will make some money.

Speaking of money, I paid nothing to use the Smashwords system, and nothing to use Amazon Direct Publishing. You have no excuses, go publish something.

Smashwords Author page for Todd Curtis Author page for Todd Curtis

Podcasting production book from

If you create or manage a web site, blog, Facebook page, or other online resource, if you are in the business of increasing traffic, enhancing search engine results, or serving a specific audience, one way to do so is by using podcasts. Whether it is the classic audio only podcast distributed on your web site, or a video podcast that you distribute on a video sharing site like YouTube, if you want the podcast to be successful, you have to be able to create many episodes over a long period of time. has produced the Conversation at podcast since 2006, and last year created an ebook ,The Podcasting Manual, that laid out a systematic production process that makes it easier for an individual or an organization to sustain a podcast over the long run.

What's in the book?
Below is the table of contents of the book:

CHAPTER 1: Introduction to Podcasting
CHAPTER 2: The Grand Plan for Your Podcast
CHAPTER 3: What's Your Mission?
CHAPTER 4: Who’s on Your Team?
CHAPTER 5: Leadership
CHAPTER 6: Money and Other Resources
CHAPTER 7: Communications
CHAPTER 8: Planning, Production, and Distribution Systems
CHAPTER 9: Legal Issues
CHAPTER 10: The Podcast
CHAPTER 11: The First Podcast
CHAPTER 12: The Video Version of the Podcast
CHAPTER 13: Example of a Podcast Plan for a School
APPENDIX 1: Downloading and Using Audacity
APPENDIX 2: Example Podcast Episode Script

If this looks interesting, check it out one of the free download options. Feel free to buy it on Amazon as well.

You can download a PDF file, or a version that is compatible with one of the popular ebook reading formats:

MOBI (Kindle)
EPUB (Nook, iPad, iPhone, and others)
Purchase Amazon Kindle edition