Amazon Associates – Handling US Withholding Tax Requirements for International Kindle Publishers

We publish and sell Kindle books on Amazon and since we live and work in Australia, we have to deal with withholding tax issues.  This has always been confusing for us and still is to be quite honest, but until recently we have never had to pay withholding tax. We would just complete the W-8 form and just state we didn’t live or work, or hold a business entity in the US, post it in to Amazon and that would be it.

However, when our latest cheque came through from Kindle, we noticed that they had taken out 30% of the earnings. When we went and checked the last 4 cheques, we realized that yes, they had been withholding some of our money and we just hadn’t noticed before. At this point, we felt it was time to investigate this properly and figure out what we needed to do. So the following information is based on what we did.

DISCLAIMER: Bear in mind, that this is just what we did and may not apply to you. Each country is different and each individual is different…PLUS, we aren’t experts in tax laws by any means…so make sure you do your research first to make sure you are doing the right thing.

Step 1: Get an EIN or ITIN

This part wasn’t very clear for us. We kept reading on forums that you needed to get an Individual Tax Identification Number (ITIN). Since we are a partnership, we didn’t think this applied to us. Eventually we found out that  we needed an Employer Identification Number (EIN).

So if you are an individual you will need to complete Form W-7.

If you are a business of some sort, your will need to complete Form SS-4. And yes I know it does say Employer Identification Number (and we don’t employ anyone) but it is the correct one…at least it was for us.

As far as I can tell, the W-7 form needs to be mailed in. The SS-4 can also be mailed in, but it is so much easier just to ring them (+1 267 941 1099). We used Skype for this because it isn’t a toll free number and would have been quite expensive otherwise. The whole process was extremely easy. Make sure you have the SS-4 form in front of you already completed so you can answer their questions promptly. They will give you the EIN immediately once completed and will send out documentation in the mail.

Step 2: Complete the online form in your Kindle KDP account

Once you have your EIN or ITIN, you will need to login to your KDP account and complete the Tax Information section. This can be found by clicking your Account at very top right of the screen.

Amazon KDP Account Details

When it came to the part where it asked if we wanted to claim treaty benefits we ticked YES. We had always selected NO at this point and it wasn’t until we researched this that we realized that YES was the correct response. It will ask you to enter your ITIN/EIN and once done it will tell you what the amount of withholding tax will be.  Once that is completed a message will appear stating that your information has been submitted and will be reviewed by the IRS. At that point, you will not be able to make any changes so ensure you have entered the correct information to begin with.

 

Amazon KDP Tax InformationOur next step is to claim back the withholding tax, which we can apparently do. We are still researching that and I will update this post if we ever figure out how it’s done.

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We’re Still Here…

Just a quick update to anyone still accessing this site that we are both still alive and well and both still working full time online.

We’ve been having a great time working on things we really enjoy, rather than on things just to make money. I think that is the key to success with working online. When people come into affiliate marketing it really is because of the money more than anything else and because of that, there is the tendency to focus on things that you don’t really enjoy doing. We did that at the start and had websites on all sorts of topics, most that we had no knowledge about or any real  interest in.

It worked, but only because we came up with a method that worked and put a hell of a lot of time and effort into it. But, to be honest, I don’t want to work on things I don’t enjoy anymore. If I am going to work from home, then I want to enjoy working from home and not make it another chore that I have to do. I may as well be back in a regular 9 to 5 job if that’s the case.

So for the past 6 months or so, we have focused on just two topics…ASMR (just Google it for more info, but basically it is a form of relaxation) and more recently, crafts.

I experience ASMR hence why I have started to create videos around that. Wanda doesn’t experience it, but loves making the videos for it, plus she has a great voice for it, which people love.

The craft part is something we both really enjoy…really, really enjoy. So we have created a website and a YouTube channel and started to create craft tutorial and review videos. That’s still in the early stages.

In terms of affiliate marketing, we have become completely relaxed with it. Google has had so many changes, that it is hard to keep up. One of the latest that I saw was the ‘HTTPs and SSL certificate for better ranking’ nonsense.

We’ve given up worrying about Google and their many changes to improve search engine results. I don’t even want to try to keep up with them anymore…and we don’t have to. What we are doing is working, albeit, it will take time, but we can see the progression already.

So now we just use Google…we blend in and use their tools to get what we want, and in a sense, this is all Google wants anyway. They want their tools to be used but only if the quality is there and it isn’t done using black hat techniques or manipulations of the system. If you can’t beat them, join them, as they say! There’s no point constantly trying to outdo them because it just becomes a constant effort.

Google will fall eventually because they are really only about the money these days, which is a shame because they started out in a whole different direction. If they can’t even get Google Plus to work, something is wrong and even those outside of the internet marketing game are starting to dislike them which is not a good sign.

So what does this mean for us? It means that we don’t do any keyword research anymore, we don’t actively back link, we don’t write articles around keywords, we don’t create new websites on topics we aren’t interested in and we very rarely read affiliate marketing news or follow Google changes or read blogs that talk about internet marketing. And as for our product sites, we just work on them when they need updating and no more than that. They still make us money!

It also means that we have closed our Affiliate Tools HQ membership site to new members. We actually enjoyed it, but the more content we added, the more difficult it became to keep it updated. And finding new quality content to add was always a struggle. (We still have members in there that joined up when we first opened the site!)

As for this website, I will probably continue to add posts but they will only be when I feel there is something worth writing about.

So that’s the update. Would be great to hear from our old followers to see what you have been up to.

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Last Chance for Affiliate Blog Online

If you’ve been keeping track of our latest blog posts, you will know that we are having major issues with keeping this site running smoothly. We were with Bluehost originally and the site would be constantly down with no warning from them. We decided to move it to Hostgator  but Hostgater constantly shut the site down (at least they gave us a warning unlike Bluehost). Then we moved the site to WPEngine which is awesome but not really cost effective for a site not making any money.

So we brought the site back to Hostgator and all was going well until the past few days when Hostgator decided to take the site down yet again. For the past few days it has been down and despite making changes, Hostgator still won’t reinstate it. We don’t really know what the problem is and Hostgator aren’t in the business to help their customers work out these issues.

So we had to have a think about whether we even wanted to keep this site running. This has never been a big money making site for us and really has just been a way for us to babble on about what we do online as well as provide tips and hints for others trying to make money online. As you can probably tell, neither of us have added much to the site lately so is it really worth keeping at all?

So we had a chat about it and decided to give it one last chance. We decided we needed to move from Hostgator so we have made the move to StableHost. Will it be the right move? Who knows, but Stablehost have received quite good reviews so we thought we would give them a shot.

Let’s keep our fingers crossed….

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Time for a Spring Clean…Plus Amazon Earnings

We’ve been in this business for a long time now…I guess you could call 10 years a long time…and as a result, we have built up a whole lot of ‘stuff’ that needs sorting out. When I say ‘stuff’ I mean websites. We just have too many of them and then there are the domain names – we probably have about 100 of them…most doing nothing but just sitting parked for maybe one day when we get around to using them.

Stupid really…we know we are never going to get around to it because we have enough to do already. We don’t want to build more and more websites. We have enough trouble keeping track of the ones we have, plus we created new ones after we were penalised by the Google animal updates.

In other words we have a lot of stuff and it needed sorting out…we needed a spring clean. So we have been spending the past month or so doing just that. Our main task has been moving most of our old sites over to one hosting account. We had 4 hosting accounts and we really didn’t need four. One of those accounts was a reseller account so we decided to move as many sites as possible over to that account. We figured it will make it a whole lot easier to keep track of everything.

Amazon-Earnings-Dec-13So far we have moved 23 sites over. These are mostly our old sites (pre-Google updates) that we no longer really work on. We don’t want to get rid of them though as despite the Google penalties they still make us money. Just to give you an example, for the first two days in December we have made $338 on Amazon and $174 with CJ for those old sites. We have other affiliate accounts so we may have made a little more than that…I just haven’t checked.

So while they are still making us money, we aren’t about to get rid of them. We just update plugins etc as needed and every now and then we will go in and freshen some up by adding content or changing the theme…but most of the time, we really do nothing to those sites.

Then we have some new sites. We could probably classify these are Type A and Type B. Our Type A are sites that we created because we are just interested in the topic. For example, we started a gardening site because we are both into that at the moment and an ASMR site…if you don’t know what that is just Google it. So all of those are going over to our reseller account as well.

Our Type B sites are ones we created to replace our old money making sites. These are our product sites although we are tending to move away from the product based sites and moving towards more generic type sites. And when we say ‘sites’ there aren’t a lot of them. We don’t want to go back to having 20 or so sites that we have to work on.

These sites are going to stay on their own hosting account separate from the rest. We’ve been burned in the past from people finding out what our sites were. They would either copy them completely, or pick out reviews that we worked hard on and use them on their own site, or they would constantly check our site stats and tell us that our system didn’t work if we suddenly had a drop in traffic…blah, blah, blah! We still get those sorts of comments to this day.

So those sites are hidden…WHOIS made private, different domain name account, different hosting account, different Amazon account etc etc.

We’ve also moved the Affiliate Blog site over to the reseller account. In a previous post I wrote about how we moved the site to WPEngine hosting. We were happy with the move and would have liked to have stayed with them but it really wasn’t cost effective in the end. This site gets a lot of traffic and we would go over the allowable traffic usage each month. (Note that WPEngine also includes bot traffic in their calculation). This meant paying an extra $10 or $15 a month in fees.

If we moved up to the next level it would have been $99. That wasn’t a problem but we would have only been able to add another site or maybe two before we’d reach the traffic limit again. So in the end, we decided to move Affiliate Blog over to our reseller account.

There were also some sites that we trashed completely. They weren’t making any money and we knew we would never get around to working on them again. I think we trashed around 5 sites – I would have liked to have trashed more but like I said before, we aren’t going to toss away sites that are still providing us with an income.

Then there were the domain names. We just had way too many and they needed to go. So for at least 10 of them we just let slide and no longer paid for the renewals.

For about 30 other domains, we put them up on Godaddy Auctions to sell. They have already gone through a 7 day auction with no sales but the best thing about Godaddy domain auctions is that you can relist as many times as you like and it doesn’t cost a cent. So what we are going to do is just continue to relist them until they either sell or expire. None of them are terribly exciting so we don’t expect miracles here but if they sell then great!

So all in all, it’s been worth the effort. We still have a number of websites to transfer over so we are focusing on that at the moment but once that is done, we are going to feel a whole lot better having everything organised.

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