How about a discussion of one of everybody's favorite topics: money?

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Title: How about a discussion of one of everybody's favorite topics: money?
Creator: Jean Lorrah
Date(s): July 1978
Medium: print
Fandom: a focus on Star Trek: TOS
Topic:
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How about a discussion of one of everybody's favorite topics: money? is a 1978 essay by Jean Lorrah.

It was printed in Right of Statement #1 as part of a three-essay series called "For Your Information."

From more context on this topic, see Timeline of Fandom and Profit Meta.

Some Topics Discussed

From the Essay

Everybody knows that publishing a fanzine is one of the most expensive hobbles one can have. However, did you know that it can become even more expensive if you should (God forbid!) make a profit? I just learned this when I filled out my 1977 income tax reports, for in 1977 I committed the cardinal sin: I made a profit on THE NIGHT OF THE TWIN MOONS and PARTED FROM ME, combined. A very small profit, but Uncle Sam doesn't care about how small it is -- it is still a profit.

The IRS is even more insidious than it appears at first glance. For example, publishing an amateur magazine counts as a hobby, not a business and therefore when you take a loss, you can not deduct it. But make a 59¢ profit, and suddenly every penny paid to you becomes income, and you had better have receipts for all your printing costs, typewriter ribbons and/or rental, envelopes, postage, dealer’s fees, etc., or you will have to pay taxes on non-existent funds. Thus, the first thing for the would be editor to buy is a ledger — and the first item to go in the expense column is the price of the ledger!

Faithfully, day by day, keep a running record of everything you spend on the 'zine. Pay all bills by check. When you go to a con, and pay your hotel bill out of the receipts from the zines you sold, be certain to log the cost and keep the receipt. Keep all these records whether or not you make a profit — you might be called on to prove that you didn't make one if the IRS gloms on to one of those non-paycheck deposits to your bank account. They make their inquiries on the basis of what goes into the account — you have to prove what came out of it.

Did I say IRS was insidious? Here comes the kicker. I had all my records and receipts, so I ended up paying very little income tax on my very little profit from NTM for 1977. But then, my accountant said, ’’Now we’ll have to figure what you owe in Social Security.”

Social Security?

Here, my friends, is why you don’t ever want to show a profit on a fanzine at the end of the year. Remember, people send you the cost of the fanzine, plus postage. Admittedly, my turnover of zines is one of the largest in fandom — but then, mine are moderately priced because I have a printer who works with me to keep costs down. Almost $4000 came to me from fans in 1977, I sold a $3.00 zine and a $1.00 zine. People selling $6.00 zines don’t have to sell as many copies to add up to the same gross income.

And for Social Security purposes, THAT ALL COUNTS AS INCOME!!! Not just the profit. Every penny of gross income is considered as choice pickings by S.S. the minute you turn that 59¢ profit for the year. In my case, my teaching job pays almost the S.S. maximum, and I had had another job that year on which S.S. was withheld, so it turned out I didn’t owe anything. But oh, you students with no income, or those of you with $6000-$8000 per year jobs — look out! If your true income was $6000, S.S. was withheld on that amount. If you took in $3000 on fanzines, and ended the year with a profit on your zines of $1.29 — you are suddenly responsible for Social Security on $9000! Plus fines, for not having paid the excess in quarterly. Ain’t that cute?

When I printed PARTED in October, I really thought that would cancel out any profit for 1977. The cost of printing certainly did, and then some! But it sold like crazy — and it sells when the money comes in. That’s when you have to count it, not when you send out the copies of the zine. So, here’s some advise: always print in November, and make sure that the printer sends you the bill and you pay it before December 31.

Actually, I just wasn’t aware. What I should have done was add up my books about December 30, after the day’s mail came, and on December 31, made out a check for my profit, plus 1¢ to make it a loss, for the year, to the Star Trek Welcommittee — a legitimate tax deduction. Then my fanzines would have remained a hobby for 1977.

Well, that's a lot of business you're not interested in if you never plan to publish a zine. On the other hand, I never planned to publish a zine

and now I'm on my third one! Plug, plug: NTM COLLECTED, VOLUME ONE is now available, for $2.50 plus 80¢ postage.

Fan Comments

I would like to say something about Jean Lorrah's comments in ROS #1. I like Jean. She seems like a very nice lady. But her comment, "As you know, a fanzine editor wants to make a small profit on his current zine in order to invest it in his next zine," ranks, in my mind, with my father-in-law's comment, "of course, you're paying yourself back for your time?" Hah! I can't "pay myself back for my time." That would be making a profit, and if I'm doing that I should be paying royalties, plus income tax, etc. That would be damn near pro-publishing!

I resent hearing that zine editors are "making a small profit" for any reason. Hell, a profit is a profit. There's no such thing as a semi-non-profitzine! I resent paying for part of the zine editor's next project. I resent paying for part of the ed's con expenses! So sorry, Jean, and you other editors who are "making a small profit", I have no sympathy for your tax problems.

I will state here and now that any zine I print has been, is, or will be totally non-profit. My readers do not pay for the next issue, for postage or phone costs expended, nor anything else only vaguely related to the rag they hold in their hands. I did my first zine back in the bad old days when a zine editor's only financial goal was to break even and I believe in that way of doing it.

And since I'm on the subject of resentments, I resent the high cost of so many of the zines that are being produced today. I will not buy any zine now that I'm not almost absolutely sure I will enjoy; I can't afford to. I realize that most of the problem of costs is because of offset printing cost increases. But, as someone once said, 90% of anything is crap. Or, if we speak a bit more moderately, 90% of anything is mediocrity. And that definitely applies to zines. What I resent in zines is that you pay m high price for mediocrity these days. I don't mind an expensive zine if I've gotten my money's worth in good material. But such is not the case with most zines.

And I wouldn't mind lesser quality in less expensive zines. After all, we are amateurs and can't be expected to put out pro quality work. But some editors are charging pro quality prices! And most of the time the material the print doesn't deserve the high prices they must charge be cause the zine is offset.

[snipped]

So why don't more zine editors use mimeo? Well, I have an opinion that some will consider rather harsh: laziness. The modern electric mimeo can do just about "everything but put on the coffee" -- as one of my correspondents put it. With one of these mechanical marvels there isn't a lot more work than with just taking the pages to a printer. But the editor must have a decent machine and must know how to use it properly — and most editors seem too lazy to try. [1]

Jean Lorrah's article with advice to zine editors was particularly interesting. I feel very few editors think about, much less realize, some of the "problems" that can arise when one ventures into amateur publications. Jean did an excellent job of pointing out some of these "pitfalls". [2]

I got my Right of Statement, and it looks very good. And it's brought up a lot of stuff that's been bugging me for a long time. For one thing, all tax difficulties aside, what is there about the making of profit that is intrinsically wrong? A lot people seem regard anyone who takes even 25 cents off the top of a price of a fanzine a Robber Baron. What with the rising costs of postage, plus the costs of paper and printing, putting out a 'zine would be strictly for rich kids if the readers were not asked to take on some o the burden of paying for the 'rag'.

Well, you say, what about buying a mimeo? And where, pray tell, does one put the beast? Not all of us live in huge Victorian houses with basements, attics, and spare rooms. I know that if I were to place a mimeo in my 4-room apartment, my husband, my kids, and I would have to leave it. Nor do all Trekkers have access to office or school duplicating equipment. This leaves us at the mercies of the local printer, who tends to charge more and more for the simplest procedures. There are assorted hidden expenditures, like tables at cons, and postage, which is usually counted into the price eventually set for the 'zine. The point is that very few people these days are in a position to give away their time and effort, even for the love of Trek, without expecting a small return on the investment. Since this small return is usually ploughed back into the 'zine in the form of postage or printing or advertising, and since this hardly goes to support the 'zine editor in luxury, but only permits said ed to continue to publish, I think the quibbling is sanctimonious and not very reasonable.

Pro-publishers are in the business of publishing on a grand scale, and they stay in business because they charge an amount that will let them continue to publish. There is nothing wrong with fan publishers doing the same. Especially fan publishers who must also support a family, pay college tuition, and meet assorted other expenses.

"The electric mimeo" — says Ms. Fleming. And who can afford the outlay, and where do you put it? "The local printer"-- says I. Dicker,if you can; pay if you must, and charge a minimum for the 'zine. As for the quality — that's up to the buyer, no one forces anyone to buy any thing. If you feel a' zine is crap, then don't buy it. Read the reviews, ask your friends, and then buy the 'zines. With so many fanzines proliferating like Tribbles, there is something for everyone, and surely something for Karen.

I try to cut corners where I can -- but I have to charge enough for my 'zine to pay the printer, and to have enough left over to cover the deposit on the next ish -- and that makes me a Capitalist, I guess. [3]

So Karen Fleming thinks all zines should be non-profit and then proceeds to expound on what she considers non-profit. Sorry Karen, but as an editor, if I call Washington State from New York City, that's a zine expense if the call is to discuss a story in the works. That is estimated into the cost of a zine. If other zine editors discounted the cost of postage, phone calls, secretarial supplies and the price of tables at a con (or, for that matter, con expenses for a con I wouldn't go to if I wasn't selling a zine), the editor would go broke very quickly... Non-profit in my books means making the zine pay for itself so I don't have to pay for anything out of my own pocket. To carry Karen's ideas of non-profit to an extreme, she would pay for the zine out of her own pocket and not charge the reader anything. And she would soon find herself with a zine, but no place to live or work. Just to reiterate, making a zine pay for itself is not making a profit. [4]

I never expect my zines to pay my con expenses — but I do expect them to pay their own! That is, they don't pay for my bed or meals, but they do pay for their own table [at a con]. That is only common sense. If it makes you feel good to lose money, Karen, more power to you. Each person has the right to do what makes her feel good. But going a dollar or two over breaking even on expenses, after giving hours, days, weeks, and years of lovingly- spent time to fandom can hardly be considered cheating the fans. [5]

I notice a lot of comments about the high price of zines, one of them verging on hostility. I don't know anyone who makes a profit on these, even the higher-priced ones...a zine editor should make a little money from one zine to help defray the costs of the next zine is hardly out of line... Such things as postage costs -- particularly in the shipping of artwork in a way that the Post Awful will do the least amount of damage -- flyer costs, and just answering inquiries sent by people who do not know what a SASE is, is not a negligible amount of money. If followed strictly, this leaves zine publishing to those of upper incomes -- and do we really need to make this into an upper-class hobby? Agreed, lower-income people cannot purchase expensive zines. But there is another alternative to the hassle of a mimeograph (and mimeograph, if my experience with it is typical, is a royal pain in the ass) which I think should be seriously considered. [6]

On the subject of who pays for the expenses, direct and indirect, of publishing a fanzine, it's important to ex amine the questions o.f principle raised by G.M. Carr's suggestion that zineds write off their expenses as business losses. Hopefully, the zined could then pass on his/ her tax savings to the zine reader, and this would keep down zine costs. But whether or not this this happens, using a zine as a tax write-off is, in effect, forcing Uncle Sam to subsidize the zine. This may bother some people. It doesn't bother me. Government subsidy of the arts, via a method which encourages independence, pluralism, and diversity, is fine as far as I'm concerned. But some may feel differently, so it's best to consider all . the possible political/social/economic/moral issues that might be involved.

Incidentally, if you should sell your zine collection or art collection for more than you paid for it, you are supposed to pay a capital gains tax on the difference. You may ask, does the IRS really check on these things? Jean Lorrah is correct in pointing out that it is the extra in flux of several thousand dollars into the bank account of a person who's filed a tax return that is likely to be most visible. [7]

References

  1. ^ from Karen Fleming, a letter to Right of Statement #2
  2. ^ from Frances Zawacky in Right of Statement #2
  3. ^ comments by Roberta Rogow, from Right of Statement #3
  4. ^ from Linda Deneroff, from Right of Statement #3
  5. ^ from Jean Lorrah, the original essayist, from Right of Statement #3
  6. ^ from Kathy Resch, from Right of Statement #3
  7. ^ from Judith Gran (from much, much more extensive comments), from Right of Statement #3
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