Q&A: What are the tax advantages and disadvantages of a textbook author setting up an incorporation rather than operating as a ‘sole proprietor’?

Q: “What are the tax advantages and disadvantages of a textbook author setting up an incorporation rather than operating as a ‘sole proprietor’?”

A: Stan Gibilisco, author of several textbooks including Geometry Demystified:

“I tried this when I lived in Hawaii and discovered, to my horror, that my royalty income was subject not only to their income tax, but to their ‘sales’ tax as well (they call it a general excise tax). I figured that if I formed a Nevada corporation and had all my income channeled into it, and then became an employee of that corporation, the royalty income would not be subject to that onerous tax. It was a beautiful theory, but, like so many theories, did not work. The legislators in Hawaii had thought of that before I did and the law was airtight. Love it or leave it. I left.

6 Tips for marketing your textbook

Q: “I have been writing a textbook but so far have been unable to interest a major publisher. I may publish it with a small publisher without a sales force. That leaves me to market the textbook. Can you share some advice for what I should do in this situation?”

A: Robert Christopherson, professor emeritus of geography at American River College and author of the leading physical geography textbooks in the U.S. and Canada:

  1. Examine similar textbooks in the field you are writing in over the past 10 years. Record publisher names, editors listed on the copyright page, and begin a list of any reviewers listed in the Preface. This process will give you an idea of publishers active in the discipline and some you might want to contact with your proposal.