Something amazing happened during my seven-month hiatus away from writing: the tax worries and hassles that plagued writing entrepreneurs in Canada had eased. In fact, it’s so darn easy now that no one—absolutely no one—has an excuse for not completing the tax form to prevent the IRS from claiming 30% of your royalties from your books.
More than a month ago, CreateSpace sent a message to update my tax information. I meant to take care of it, but like many things since March, it got lost in the chaos of life. The deadline came and went, but fortunately CreateSpace—who really wants my business—extended the deadline.
If I didn’t update my tax information, I would no longer be able to sell through CreateSpace. They certainly didn’t want that to happen, so a grace period of thirty days was awarded. This time I took advantage of the notice and stayed up late one night to see what the fuss was all about.
The questions were straight forward and easy to answer: Was I a US citizen? Did I have a business in the US? Etc.
Then came the question regarding tax identity. I believed I could quote my EIN (Employer Identification Number) and be done with the form, but…I had to read the question and instructions a few times before I got the plain truth staring at me from the computer screen:
Enter your income tax identification number issued by your local tax authority for income tax purposes.
In everyday language in Canada that translates to: Enter your Social Insurance Number (SIN).
Every Canadian citizen needs one of these to work in this country, so they are as common as a bank account number, as a house number.
In other words: Canadians who possess a SIN no longer need to worry about an EIN or an ITIN unless they have extenuating circumstances.
Once your SIN is entered, you are delivered to an electronic W-8BEN to review with the information you provided. There is a section at the beginning which provides more information on which form to fill out if you do not meet the requirements for the W-8BEN.
If everything is correct, then you move to the next section: Consent and Signing.
You must then check either “I consent to electronic receipt of my information reporting documentation”, or “No, mail the documents to me” instead.
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Then you have to consent to providing an electronic signature. Or you could have the documents mailed to you to sign.
After reviewing the agreement you’ve signed and answering a few simple questions to confirm your answers, you’re done the tax interview.
After the electronic form is submitted, you have the option of printing it for your records. I recommend you do this in case something ‘gets lost’ or you need to refer to it in the future.
The original post with regard to EIN and ITIN is here: Canadians, Stop Paying 30% to the IRS
Regarding Questions: I receive many questions about EIN and tax information both in the comments below and in my inbox. I do my best to answer in a timely fashion and to the best of my ability, but I am not a tax expert, I don’t know all the answers and my time is limited. I earn a living as a writer, so if information I have provided here or by answering a question proves valuable to you to either save money or make money, please consider buying me a cup of tea. It costs only $1.50 Canadian and $1.09 US (exchange rate May 5, 2017). Thank you.