Proposed IRS regulations issued providing guidance on new 20% deduction for flow-through entities

The IRS and Treasury issued proposed regulations providing interim guidance on the new Section 199A 20% deduction on Qualified Business Income (QBI) introduced under the Tax Cuts and Jobs Act. The law contains a series of complex provisions, definitions and computations, many of which are addressed by the Service. The preamble to the regulations provides that taxpayers can rely on this guidance until such time that final regulations are issued.

This new provision of the Internal Revenue Code allows owners of sole proprietorships, S corporations, LLCs, or partnerships a deduction of up to 20% of the income earned by the business. [Read more…]

Taxes and Authors: What you should know

Calculator and penIn his recent TAA webinar, “Taxes and Authors: What You Should Know”, Robert Pesce, a partner at Marcum LLP, shared some important information about the new tax law. He also offered advice on two key questions for tax-conscious authors: 1) What type of entity should you be? and 2) Are you keeping good records on your business deductions? [Read more…]

3/19 TAA Webinar, ‘Taxes and Authors: What You Should Know’

Robert PesceWhile it is understandable that most writers would prefer to concentrate their time on their writing, writing is a business and you need to make sure you’re taking care of all of the tax deductions that you should be.

Join us Monday, March 19 from 3-4 p.m. ET for the TAA Webinar, “Taxes and Authors: What You Should Know”, presented by Robert M. Pesce, a partner with Marcum LLP. [Read more…]

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.

Tax tips for writers

Tax Tips for AuthorsWith tax season approaching, I thought it would be a good opportunity to compile five posts from the archives containing tax saving strategies for writers. The first, LLC or S-Corporation? has also been one of our most popular posts, so it seems many are looking for advice as they begin to prepare for filing their taxes.

In the following five posts, Robert M. Pesce, a Partner at Marcum LLP, shares several strategies that writers can employ to save money on their business expenses: [Read more…]

Tax tips for authors: Taking the home office deduction

Robert Pesce

Tax Tips for Authors

Many people believe that taking the home office deduction makes you automatically audited or that it drastically increases your chances of being audited. I don’t think it automatically causes you to be audited, but I do believe that it is something that auditors look at, and it does, I believe, increase the chance of you being audited, albeit still a small chance.
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Tax tips for authors: LLC or S-Corporation?

Robert Pesce

Robert Pesce

Tax Tips for AuthorsWhile the simplest way for a small business, a writer, to report their income and related expenses is on Schedule C of their personal tax return as a sole proprietor, the two most popular entities for authors thinking about expanding beyond a sole proprietor are LLCs and S-Corporations.
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Tax tips for authors: 3 Simple steps to organizing your business expenses

Tax Tips for AuthorsWhile it is understandable that most writers would prefer to concentrate their time on their writing, writing is a business and you will need to spend some time keeping the business of your writing organized and making sure you’re taking care of all of the tax deductions that you should be. The worst way to track your business expenses is to throw everything in a shoebox.

Here are three simple steps to staying organized so that at the end of the year you or your accountant can easily get the information needed for your tax return–from the fewest number of sources–to summarize the income and expenses related to your business. [Read more…]

Tax tips for authors: Understand foreign taxes, tax credit and tax certification

Robert Pesce

Robert Pesce

Tax Tips for AuthorsIf you have sold your textbooks in foreign markets, foreign publishers may withhold foreign taxes at the source before the money is paid to your agent and before it is paid to you. If they are doing that, and you earned, for example, $10,000 in a foreign country, 10 percent, or $1,000, will have been withheld from your payment. Your agent would have received $9,000, and withheld his 15 percent commission on the $10,000 you actually earned. So you would end up getting about $7,500. [Read more…]

Tax tips for authors: Learn how your agent is reporting your writing income

Robert Pesce

Robert Pesce

Tax Tips for Authors

One of the things that can affect your tax returns is the income that you report from writing in the form of royalties, advances, etc. Many of you will have literary agents and those agents will report to you what you’ve earned at the end of a year on a 1099. While the IRS says that agencies are supposed to report to their clients the gross income amount that was received, most agencies report on the net basis, and the IRS doesn’t seem to be aware of, or care about that. But as an author, you really need to know on what basis your agent is reporting income because it could potentially affect your tax return. [Read more…]