No one I know started writing a novel because they were looking forward to the financial paperwork. This article will help you decide if keeping your writing as a "hobby" is right for you even after the royalty checks come it.
You should seriously consider forming a business if:
- You are directly selling your book.
- You get income from other related sources such as speaker fees or selling merchandise related to your books.
- You are writing about a controversial subject and need the protection of an LLC.
Starting a business is a bit of extra work. You need to open a separate bank account. If you have a pen name it should be registered with the state you live in. And then there is records. Of course you know to keep every receipt, but did you also know the IRS might ask for a log of the hours you work?