Open Question for Writers re: Taxes

[eredien]

I've just filed my taxes, and reported income from writing.

How do the rest of you, who might not write for a living but occasionally make money at it, report your income from writing?

In other news, I found out that even though I am still not eligible to itemize my deductions, I can save the deductions for up to 5 years and take them all at once should I become eligible.

Now all I have to do is become eligible in the next 5 years...

Comments

[eredien]

Look under the Charitable Donations section in this article for a basic overview.

The IRS publication 526 has more information. It is on page 15 in the section entitled "carryovers."

[friode.livejournal.com]

I thought the basic idea of the standard deduction was that it's (maybe, or maybe this is a bit too much of a stretch) a rough estimate of typical itemized deductions, and if your actual deductible stuff is less than that, you get to skip the paperwork and claim the extra bonus deduction. The spirit of that makes me doubt you can carry any itemized deductions over if you choose to take the standard deduction instead of itemizing.

Though another thing that goes into this is that having a standard deduction and a personal exemption is a way to make the tax system more progressive / less regressive (that is, by having a fixed dollar amount, it benefits the poor more than the rich when looking at it as percentage of income).

[friode.livejournal.com]

My vague recollection is that the tax code has this concept of royalty income in some weird tax schedule somewhere that I've never dealt with. It wouldn't surprise me if writing income were supposed to go there.

[trifles.livejournal.com]

Oh heck, let me see if I can remember what our silly tax people did... I received a tax form (a W-2, I think) from my agent detailing the full amount I received from the publisher (plus an additional letter stating how it should be itemized to account for the commission paid to the agent). The tax form that needed to be filled out by our tax people was the 1099 (PDF from the .gov here). I believe you need to fill out a separate one for each different source o' cash (so, for instance, if you sold to Really Big Mag and Interesting Esoteric Journal in 2008, you'd need to fill out two separate forms) -- but check that if you can.

Despite popular publishing terminology, the amount of money you received as a full payment (or, in my case, as an advance) seems to be placed under line 2, "Royalties". If you have an agent, their commission goes under line 7, "Nonemployee compensation".

Anyway. I'll doublecheck our tax stuff when I get home, but I believe this is how it was done.

[trifles.livejournal.com]

Okay, I looked at my crazy taxes. Per my tax people, you want to fill out a Schedule E, the Supplemental Income and Loss form (note: I made less than $10,000 in supplemental income -- other forms may apparently apply if you make more).

The bits you fill out are line 4 ("royalties received" or how much money you made per the W2), line 8 ("commissions", if you have an agent), line 15 ("supplies", like pencils, paper, how much internet access you think you might have spent on whatever you were writing, etc.), line 16 ("taxes" -- I have no clue from where these are derived, but it needs filling out), and lines 19, 21, and 22 (to total the whole thing up).

Interesting things from the instruction sheet that apply here:

Report on line 4 royalties from oil, gas, or mineral properties (not including operating interests); copyrights; and patents. Use a separate column (A, B, or C) for each royalty property. Be sure to enter the total of all your royalties in the “Totals” column even if you have only one source of royalties.

If you received $10 or more in royalties during 2008, the payer should send you a Form 1099-MISC or similar statement by February 2, 2009, showing the amount you received.

If you are in business as a self-employed writer, inventor, artist, etc., report your royalty income and expenses on Schedule C or C-EZ. [Note from Cass: So far as I know, though, you're not currently self-employed as a writer.]

I hope this helps -- or at least, makes the confusion go a new and fascinating direction.

[eredien]

Ack, I think I filled out a schedule C.

Maybe next year I will talk to an accountant.