How reporting royalty income affects taxes for authors

Taxes for authorsIt is well established that an author who is engaged in the business of writing for income should report royalty income on Schedule C, not Schedule E. But what about a retired author who no longer is writing but still receives royalties from previous work? Should retired authors report royalty income on Schedule C or E? Or, should a sole-proprietor S corporation that reports royalty income as corporation profits and author wages be used? Each reporting method has tax consequences and legal issues.

TAA member and veteran textbook author Phil Tate conducted extensive research to answer these questions and has compiled that research into a document entitled, “How Reporting Royalty Income Affects Taxes,” which he is sharing with TAA members. Click here to login and view. Phil also shares his non-expert, non-legal opinion to help you decide how to report your royalty income.