I finally made the decision to close my business. I’m not sure how many of you are aware of LLCs, but years ago, I was told an LLC was a good idea for a writer. For possible tax savings, it can be, but you have to make a certain amount in order for it to make sense. If any writers out there have questions about LLCs, feel free to ask. I set mine up in 2013 and am now dissolving (aka closing) it. So I can answer some questions about this.
Overall, I found the LLC to be more of a pain than it was worth. I was set up as an LLC but was taxed as an S-Corporation, which meant I had to run payroll. I hired out for payroll. And I have an accountant who works with small businesses. I plan to keep the accountant. There’s no way I want to deal with filing my own taxes. I’m not that type of person. All I really want to do is write.
Anyway, for the next couple of weeks, I’ll be running all over the place getting things wrapped up with the LLC, so I’m not sure how much I can come over here. I’m also participating in National Novel Writing Month (NaNoWriMo). The goal of NaNoWriMo is to reach 50,000 words during the month. It’s a fun challenge, and right now, I want to use the spare time I’ll have to do something fun with my time.
I’m looking forward to getting out of the LLC. Something happens when a writer starts thinking of writing as a business. The focus gets off of the internal reward for writing. Instead, the focus goes to external rewards. I’ve learned internal rewards are not compatible with external rewards.
Internal rewards come from the satisfaction of doing something you love. It is not reliant on any other factors. It is writing for the sake of writing. It is the only thing under a writer’s control. External rewards depend on factors outside of a writer’s control. It is about awards, making bestselling lists, sales, and money. It all depends on what others do.
I’ve been thinking long and hard about the difference between internal and external rewards, and I’ve decided I’d rather have the internal kind. It is HARD to get back into the mindset of writing for that internal reward that came so easily to me in the past because as soon as I realized external rewards existed, I felt like I had to earn a certain amount of money in order to be “somebody” in the writing community.
Suddenly, it was about proving myself to other writers because no one really cares about what a writer has to say unless the writer has proved him/herself through income, a bestseller’s list, and/or an award. That’s why those things matter so much to a lot of writers. The LLC only reminds me of that. It forces me into the mindset of being a “business”. I’m sure it doesn’t do that to all writers, but it did it to me because I had to worry about making a certain amount of money in order to keep running the LLC.
I want to be happy. I’ve been reading a book about being happy, and as simple as this sounds, the author is right: I have to be happy first. And in order to be happy, it’s important to be content with what I already have. When I look at my life, I realize I have it good. All of my needs are met. I’m fortunate. Looking at what I don’t have is exhausting, and it drains me of my passion for writing.
This is why I think writing to market is doomed to fail in the longterm. I’ve heard writers say they’re happy writing to market since the money is so good, but money is an external reward. In the end, I don’t see how it can satisfy, and I also don’t see how a writer is going to be satisfied with their books if they write it for other people. (Another external reward is approval from others. This can come in the form of praise, sales, or awards.) What I’ve discovered over the past few years of chasing external rewards is that there is no amount that is enough. There’s always more to gain. And that only frustrated me. It didn’t make me happy. I actually began to hate writing, and there were a few times when I thought I never wanted to write another word again. That scared me. And then I wanted to cry because, deep down, I knew I wanted to write. I had just lost my way. I had lost my joy.
The writers who have embraced writing for internal rewards are happy. I’ve come across them, and you can tell they’re happy by the way they talk. Also, their stories have a passion in them that comes through their writing. You can tell they put their hearts into the stories, and you can tell they had fun while writing them. They started self-publishing when I did, and they’re still writing with the same enthusiasm they used to.
I know this isn’t something that the world embraces. The world is geared toward external rewards. People are praised, admired, and respected for external rewards. Does that mean a writer who focuses on internal rewards can’t make money with their books? No. I learned long ago to never say “never”, but the writer isn’t going to be happy if money is the goal. Money is a gift, and it should be appreciated. But it shouldn’t be the goal. Once it becomes the goal, it taints the way a writer views writing.
External rewards taints the way you do anything. In the final analysis, internal rewards gives you longterm fulfillment and joy.
If you’re curious about the book I’m reading, here’s a link to the site where you can find more information about it. If you’re struggling with being fulfilled (like I am), I recommend it. This is one of those books you’ll want to read more than once, and I do think it takes time to let the lessons really sink in. The author did address the difference between internal and external rewards. (This was under the section about success.) Anyway, it was while I was reading that passage in the DMV line that things fell into place for me, which is why I focused on that specific principle in this blog post. (For those who might not know, DMV stands for Department of Motor Vehicles. The line can be long and slow. It’s worth taking a book if you ever have to go there.)
I almost got an LLC well before I ever published something, but I was talked out of it by some family members (can’t remember their exact argument). From the sound of things,I dodged a bullet.
Your family did you a favor. Usually, the argument for making an LLC is to protect your personal income against a lawsuit. I spoke with a lawyer last week and found out if I were to get sued, the LLC wouldn’t protect me because people would sue me by my name, not the name of the company. As authors our names are our brands. I don’t know if a pen name would offer any protection since that didn’t come up in the discussion. The main benefit of an LLC is taxes, but you have to set the LLC up to be taxed as an S-Corporation. This means you have to run payroll, so you are your own employee and subject to fees and monthly tax reports. I went to the accountant and discovered that for me (with four kids), I would need to make over $100,000 in order for the tax break to come into play. Kids offer a tax break. Needless to say, having the LLC makes no sense in my situation.
And I thought what I wrote was scary.
This is the best comment of the year! 😀
You’re welcome. 😉😂
It’s always hard to know what decision to make. I’m glad you figured it out – but sorry it stressed you out so much until you did. I’m hoping to strike a bit of a balance because I still love writing more than anything else I could be doing. It’s just sad that it’s gotten so hard to make a living at it.
I’m sad about that, too. It was so much nicer a couple years ago. I wish I had saved the money I was making back then.
I’ve been focusing so much more on the important things in life lately. We do sometimes struggle to pay our bills, but we eventually get them taken care of, even if they’re late. Hubby and I decided that having him home and spending time together was more important than him working so much overtime to try to make ends meet. We are trying to prioritize the right way…the way God wants us to. So I’ve stopped obsessing about how much money I’m NOT making with my writing. If I have a breakout book again, that will be wonderful. But I’m not going to worry about it anymore. Life is too short to worry about material things all the time.
I agree. For me, a big part of NOT thinking of money is to dissolve the LLC. The LLC is based on payroll, so I have to make a certain amount of money in order to meet that requirement. I can adjust the amount here and there, but I have to be careful to makes sure I’m giving myself a “living wage” that satisfies the IRS and my accountant. It’s just easier to be sole proprietor. That way, if I don’t make money, it doesn’t matter. That frees me up to stop thinking of the LLC in terms of how much can I earn.
I already got things set away with my accountant so the last date I’m responsible for the LLC is November 5 for tax purposes. Now I’m officially a sole proprietor again. I just got a new business account and switched everything over on Amazon, Smashwords, Google Play, and Draft 2 Digital. I think I’m good to go now, minus the filing of some paperwork that will wrap things up. I already feel much better.