Wednesday, February 09, 2011

Conf 661: How To Fill Out US Tax Form IRS ITIN W7

UPDATE: The system has been relaxed! In the UK anyway, the embassy will accept phone requests for an EIN NUMBER. The below was my experience before EINs were being handed out. 

See also later post what to do when you get your EIN/ITIN Number.

YET ANOTHER UPDATE - APRIL 2013 It seems the system is becoming more confused and some writers who make enquiries are being steered back to ITINs. EIN numbers have always been for businesses, but authors working alone are sole traders and therefore can be eligible (but do you have to be registered self-employed and therefore change your National Insurance payouts?). Thankfully there are two excellent blogs to see you through all the possibilities and detailing the latest changes (apparently sometimes passports themselves are sent to Texas rather than certified photocopies). To read all about the ins and outs go to

Karen Inglis' blog


Catherine, Caffeinated

Further to my last post on US royalty laws and overseas authors I've been to the US Embassy in London and am now on the way to getting my paperwork sorted. If you don't have a tax exemption code to give US Amazon and US-based Smashwords (who make and distribute all your ebooks for Apple iBooks in the US and UK, Barnes & Noble etc), 30% of all your royalties will be deducted at source.

Not there yet but major hurdles, like what exactly you say on the form, overcome.

The first problem was getting inside the Embassy. As closely guarded as you'd imagine. I went up to the security entrance hut and tried to walk in but was swiftly expelled. I had to find a man on the pavement (sidewalk) standing at a table. He's the pre-security security man. Very friendly but told me it was closed and to come back at 2.

After enforced shopping on Oxford Street (Selfridges or Primark? guess which won), was back at 2 but the pre-security man had disappeared complete with his table. Panic. However, was allowed inside hut this time. After Airport-like security & going to wrong Reception found the IRS office on a lower ground floor. I don't know why but had imagined this as being like a post office, with counters and really unhelpful, officious staff. And I expected to have to wait for a long time, possibly hours. I do know why. This is the impression you get when you first set eyes on the form.

However not at all. In a small, comfortable room (with no queue at all) I met with a very friendly smiley biiiig American man who couldn't have been more helpful. 

Here is the form ITIN W7 for download.

Get here

You can fill it out online or print and fill in.

Now for the non-logical bits you have to fill in:


Reasons you are submitting Form tick TWO of the listed reasons:

a) Nonresident alien


h) Other (see instructions) and WRITE IN: Exception 1(d) – ROYALTIES

Where it says “Additional information for a and f” in tiny letters underneath this list:

Enter treaty country: WRITE IN: UK*  and treaty article number: WRITE IN:  Article 12

Amendment further to Anne's comment below: *to be safe write United Kingdom  


If you send photocopies of your passport they must be certified photocopies by a US NOTARY, so local solicitors' certified copies or JPs' stamps are not enough.  'The stamp must be American' they said. If at all possible the easiest way is to take your passport, form and hand signed Smashwords letter into the Embassy in London (open Tues – Fri), they'll photocopy your passport for no fee and check you've filled out  the form correctly. If you have to send your original passport by post, send by recorded delivery and allow plenty of time, at least a month, for processing.

Under 6d Identification Documents:

SIGN & DATE the form.

The good news is there's no charge for this and the Embassy staff (once you get inside!) are very helpful.

Mine wasn't processed because I didn't have a letter from the US.

The letter proving that you are paid royalties in the USA MUST include the following:

“royalties from USA paid in current tax year”
Don't complicate it by saying which tax year, just say “current tax year”. And make sure the words "from USA" are there or your form will be rejected.

As soon as you've accrued $10.00  or more royalties on Smashwords sales, Smashwords the great Mark Coker will send you an original signed letter with all the right requirements for free. They will also delay royalties until your forms are all processed.

There's another form after the ITIN W7, when I get to that will let you know.

This and much, much more information on creating and selling your own ebooks is available in my ebook:

Bye bye, thanks for visiting, come again soon.

Wednesday, February 02, 2011

Conf 660: Ebook UK Royalties: Amazon Kindle and Smashwords Sales


Still have hands majorly clamped to ears. The novel is selling a little bit in the UK, no sales on Amazon US yet. It's a delicate time, much moreso than publishing via an agent and publisher as you don't have that protective barrier of thinking hmph well, they must have liked it or they'd not have taken me on.

Ebooks really are still in their infancy here. 90% of my non-fiction sales on Amazon are in the US. Ebooks have now, apparently, overtaken paperback sales there.  So it's a bit of a priority to get my US tax forms sorted but it's so complicated. I've had my forms returned once already so have been updating the blog post I did last year.

I'll be going to the Embassy in the next week or so and will report back. Meantime here's the blog piece again:

Now that UK and overseas authors can sell their Kindle ebooks via as well as I've been checking up on royalty payments and the US tax situation.

Previously payments were made to all overseas authors via US$ cheques. This is still the case with ebooks sold on .com. You'll have to pay a UK bank charge for paying the cheque in. RBS, for example, charges £7.50 per transaction.  Amazon have recently changed their criteria on issuing royalty cheques and  now no payment is made until at least $100 is owed. On request (see Smashwords FAQ link below), Smashwords will withhold payments until your US tax number comes through.

Royalties due on ebooks sold on are paid in UK £ cheques and mailed monthly. You have to accrue at least £75 worth of royalties before a cheque is issued. Most ebook sales (at Feb 2011) are still made to the US who are 12 - 18 months ahead of Europe in adopting ebook reading.

If you haven't registered for exemption, Amazon will withhold 30% of all sales made on .com for US tax.

Update Jan 8 2012: A comment on this blog today by JTR below tells how she applied, and was given over the phone, an EIN number. EIN stands for Employer Identification Number. "I told them I was a UK based author and they said the EIN was fine, I was effectively the sole proprietor of my own business - I didn't need to go to the US embassy.." This is an excellent development which makes it all so, so much simpler. I'll keep the ITIN guidelines up but this is the way to go. Smashwords and Amazon accept EIN numbers. 

To get an ITIN number is much more complicated. This is what's involved and, thank goodness, no longer necessary:  B B B...... SORRY ANOTHER UPDATE, things change and as at April 2013 please go to my next post to get links to important updates.

First apply for a US IRS Individual Taxpaper Identification Number (ITIN) by filling out form W-7: Get here.

Embassy instructions for UK residents are here. 

When you have accrued at least $10 sales on Smashwords, you can apply for a signed covering letter from them to produce with your documents.  Details here.

You need to provide proof of identity. "Either a valid passport (original or a notarized or certified copy); or at least two or more identity documents that are current. One must include a recent photograph. In addition to a passport, examples of acceptable documentation include: national identification card (showing photo, name, current address, date of birth and expiration date); civil birth certificate; foreign driver's license; or visa." A complete list of acceptable documentation can be found in Form W-7 instructions.

Post to: The United States Embassy  
24/31 Grosvenor Square
London W1A 1AE
Tel 0207-894-0476

Or go along there.  They're open Tues - Thursday 9 - 4.
It's complicated.

The best blog on this subject is Angela Stone's Quick Guide to the W-7 US Tax Form.

THEN when you've got your number, you fill out form W8-BEN: Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Get here.

Smashwords has its own ebook store and offers free distribution to Barnes&Noble, Apple iBooks and more. How much income you get from each Smashwords ebook sale varies. It depends on whether the sale comes through from Smashwords' own sales site (85% of cover price), from an affiliate sale (via an e-reader, 70.5%) or from Premium Catalogue sales sites like Apple iBooks (60%) and Barnes & Noble.

For a $2.99 ebook you would earn:

$2.21 from each Smashwords sale
$1.84 from each affiliate sale
$1.27 from each Premium Catalogue sale.

The payments come through on PayPal.

For a detailed guide to publishing your own ebooks see:

How To Publish An Ebook On A Budget - An Author's Guide by Stephanie Zia

Buy in the UK here

In the US here