Q&A: June 2005 Archives

Yay, taxes!A: The pros are that you save money. The cons are that you lose money.

And so life goes.

A large majority of working pros do choose to incorporate. They typically do so as a California State Subchapter S corporation, aka an “S-Corp” or “loanout”.

The idea of the loanout is that technically, you cease working for employers. From incorporation forward, you work for your corporation, which then loans out your services to employers. The companies pay your corporation, and your corporation then “pays” you (even though it’s all your money).

Forming an S-Corp costs money. There are some quicky services out there, but I recommend using a lawyer or certified financial planner with experience in this area. There are initial startup costs in which you fill out forms, create articles of incorporation, blah blah blah. On an ongoing basis, there are maintenance costs as well, like annual reports to the state (a paralegal can do this) and payroll service fees (because you actually need to pay yourself like an employee).

The benefits, however, are quite significant. In addition to tax savings that are something of a mystery to me (Alternative Minimum Tax savings and stuff like that), corporations can make contributions to qualified (read: retirement) plans that generate tremendous tax savings.

I’ve always heard the rule of thumb is that if you make more than $250,000 a year in writing income, incorporating will probably make financial sense for you. If you make much more than that, it’s an imperative.

However, I’m just a simple screenwriter. I don’t understand the tax code. The only person qualified to help you make this decision is your accountant or a good tax lawyer.

Oh…and for what it’s worth…my company’s name is The Craig Mazin Company, Inc.

Boring, right? And yet, it worked for some knucklehead named Walt Disney, so why the hell not?

Have It Your Way…A: You write it, and they sell it.

This question comes up a lot. Agents exist to sell the work that their writing clients create. It’s only natural, then, that they’ll want input into the kind of product you’re designing.

I was actually thinking about this the other day. My father-in-law was in town, and we were chatting about his days spent in the Burger King business. He owned a few BK’s, which made him a “franchisee”. The franchisees are responsible for selling the products that the corporate folks invent. This occasionally led to tension. The franchisees loved big sellers like the chicken parmigiana sandwich, but they hated failed experiments like one year’s formula change in their french fries.

And still, when push came to shove, it was the content provider that won the argument. Bill grumbled and complained (as did they all), but in the end, he put it up on the menu and did his best.

In the world of screenwriters and agents, we’re the content providers. We should listen to what our agents say. They have their ear to the ground, and they have (hopefully) a good sense of what the market is responding to. On the other hand, their sensibilities are entirely reactive, and their skill sets as sellers does not particularly qualify them to evaluate material the way a buyer would.

Listen to your agents. Hear them out. Keep as open a mind as you possibly can. And then make your own call. If they refuse to sell the work then get new agents, because the ones who have are clearly not interested in representing you. They’re interested in representing the writer they want you to be.

A: Typically, it’s 12 weeks, and it’s sort of mostly not written in stone.

The MBA doesn’t contain a specific provision for a minimum amount of time a screenwriter has to complete a first draft. All the MBA says is that if you take the amount of money you’re getting paid for that draft and you divide by the amount of weeks that the employer has requested you work, the quotient must be equal to or greater than the minimum compensation for a week’s work.

Generally speaking, though, it’s up to you to negotiate how much time you have to write your first draft. Every contract I’ve ever signed afforded me 12 weeks to write a first draft, and that seems to be the contractual norm.

It’s not the actual norm, though. In actuality, companies always seem to want scripts now now now. As such, from the very beginning of my career, I’ve always tried to deliver first drafts within 8 weeks. This seems to strike a good balance between my need to spend proper time writing something worthwhile…and their need to get the script now now now.

As such, if you’re working on your own, try and see if you can’t get a first draft done in 8 to 12 weeks, because it’s a rare professional circumstance that will grant you more time than that.