Need tax advice for "royalties" paid on self published book?

Question

My husband self published a book just for fun. It is sold on-line and he receives a tiny royalty everytime a book is sold. At the end of the year the company that published the book sent him a 1099-MISC form with the royalties amount listed (which is under $100). This was a one time event so I wouldn't call him self-employed as an author. He is a full-time employee elsewhere so we usually file form 1040A. Where do I plug in this information on our tax return? Can I file 1040A? Do I need special forms? Please Help!

Answer 1

you can treat this as a business so you would use schedule C or schedule C-EZ. Since this amount is small i would suggest using C-EZ. Also you would have to use a standard 1040 not a 1040a.

Answer 2

You are supposed to report royalty income as a writer/publisher on Schedule C of Form 1040, even if there are no business expenses to deduct. Your husband would also be able to deduct any expenses he incurred, i.e. home office.

You could not report this anywhere on Form 1040a. You would need to file Form 1040 with a Schedule C-EZ.

Answer 3

Consider getting turbo tax. I remember them asking a question about novel royalties and will guide you through it. Also consider him filing the royalties as self-employed with a 1040. His W-2 wages would be exempt from self-employment taxes--only the royalties would be taxed--but you can deduct a lot. Internet fees related to his writing, office supplies, office space (in the house), any books he bought, etc . . . it would be for a loss but that loss will carryover into your regular wages and lower your taxable personal taxes.

Answer 4

You'll have to use form 1040, not 1040A. The royalties will go on line 17.

Answer 5

Actually, your husband might have spend more than $100 in getting this published. So you may not owe any tax on this amount.

You may have to include another form "Income and loss from business". If you can show all the expenses, you may be able to show a loss and you may be able to get some money back !