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

[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.