Taxes and authors: What you should know in 2021

In his TAA webinar presentation, “Taxes & Authors: What You Should Know in 2021“, Robert Pesce, a partner with Marcum LLP, provided guidance on when it is beneficial for authors to form a business entity, strategies for managing business income and expenses, and how the qualified business income deduction (QBI) applies to authors.

As soon as your authoring efforts produce income in excess of $400, you are officially running a business – whether you define a business entity or not. According to Pesce, any income in excess of $400 must be reported on a Schedule C filed with your tax return and is subject to self-employment tax.

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.

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

While 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.

How reporting royalty income affects taxes for authors

It 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?

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. In this document, Tate shares his non-expert, non-legal opinion to help you decide which schedule to use when reporting royalty income on your taxes.