Did Amazon tell you that they will withhold tax as you haven’t provided an ITIN or EIN number? Read on to find out how I got mine in 8 minutes flat!
Disclaimer: This blog post is NOT legal advice. It only tells you what I did to get my EIN account. Amazon KDP, Createspace and Smashwords already have detailed information about tax processes for non-US Self Publisher on their website. Its highly recommended to read that as well. I am not responsible for your actions based on this blog post.
When I first uploaded my Kindle book on Amazon KDP a few months back, Amazon notified me that they will withhold 30% of my earnings for tax compliance purposes. I ignored the message as it was early days. I wasn’t sure if even one book would sell, or if I would even reach the Amazon KDP payment threshold. Moreover they wanted some doc called W8-BEN along with the ITIN/EIN number. I tried to follow their process and I found it hopelessly complex and ditched the idea to a future date.
Well my procrastination came back to haunt me. Amazon recently warned me that my account would be suspended if I didn’t fill in my tax details. But there was a silver lining. They had recently created an automated Tax Interview process on their site. And the W8-BEN would be submitted automatically to the IRS online. No need to fax a document and wait weeks to confirm.
I only needed the Individual Tax Identification Number (ITIN) or an Employee Identification Number (EIN) for that.
ITIN seemed the logical choice as I was a self-published author and obviously an individual. EIN seemed to be for complex overseas business. Well, a bit of research told me that I could simply call a number and get an EIN.
Wow! I told myself. Let me try that. So I threw caution to the winds and called the IRS.
I called them at 3pm EST and the IVR told me that there was a wait time of 15 min. Bummer. I called again 10 minutes later and again heard that I have to wait 15 min. Double Bummer.
I found that the IRS office timings are 7am to 10pm. I decided to be the first to call them the next day. Here’s what happened the next day in an eight minute time span.
1. I called the IRS at +1 267 941 1099 at 6:55am EST the next day. There was no wait time and I straight away got in touch with a nice lady. I told her that I am an author and Amazon had instructed me to get an EIN for tax purposes.
2. She asked me to spell out my name, address and phone number and country.
3. She asked me if I was the CEO, COO, Director, etc of the company. I specified that I am a sole proprietor as an author of ebooks.
4. She asked me why I needed an EIN? I repeated that Amazon wanted me to get an EIN. She disregarded what I said, and started reading from a list of reasons. You have to answer ‘its for compliance with tax withholding’. It appears that they want us to say so in their particular format, and will not entertain any other response.
5. When was my business started? Give the date when you published your first book on Amazon/Createspace/Smashwords etc.
6. The next question was whether I will hire any US employees in the next 12 months. You are supposed to say No here.
7. It is my understanding that all this time she was filling in the Form SS-4 on her end.
8. She told me to wait and after about a minute, she gave me my EIN number. She made me repeat it so that she could make sure that I got it right. Yippee! I hung up thanking her, and started jumping around the room with joy. Immediately I copied it to my email and sent the email to myself.
Well, that’s my adventure of obtaining an EIN number in eight minutes flat.
The next step was updating my EIN number in my Amazon KDP account. I went through the Tax Interview on the site. Selected the option to digitally sign my name. Updated the EIN number when asked. Checked the box which said that I received the EIN within the past 60 days. After I submitted, I got a message that the EIN number was being verified by the IRS. Finally they accepted and my tax information on KDP was complete.
Note that for India, the tax withholding rate is 15%. It is also my understanding that whatever amount Amazon withheld cannot be returned by them. We will have to contact the IRS directly to get the Tax Returns.
Hope this was helpful.