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Book Royalty Tax Reporting for Self-Publishers

Posted on: January 28th, 2015 by Publisher Services


As an author, if you’ve earned more than $10.00 in royalty payments from a publisher (such as Amazon or Independent Publisher Press), you SHOULD receive a Form 1099-MISC before the end of January. Royalties received as a result of creative work such as writing, music and art, is considered self-employment income and is reported on Schedule C (see United States Tax Code ).  Book royalties are taxable income and should be included on your tax returns for money received greater than $10.  Authors DO NOT need to send their 1099 form with their tax return. The 1099 form is for your records and lets you know the amount the publisher has reported the Internal Revenue Service. 

One reason we highly encourage ebook publishers to DIRECTLY work with Amazon (Kindle) and Apple is that their platforms provide ideal tools enabling self-publishers to generate the yearly 1099 tax forms. The marketplace is now polluted with small companies trying to act as ebook publishers for little or no money.  Self-publishers should be very cautious on the “publishing companies” they work with and their infrastructure to properly account for royalties and tax reporting. BEFORE YOU SIGN UP WITH A BOOK OR EBOOK PUBLISHING COMPANY (i.e. Book Baby, Lulu, CreateSpace, etc..) it would be prudent to inquire how they prepare their year-end tax summary. If they do not provide this function, it should be a clear indication they are not prepared to help you in the long term.  With the exception of BookBaby, most ebook publishers do provide their clients a 1099, if they are due. For some reason, BookBaby claims their payments are “titular commissions” and they technically are not royalties.  This is an issue between BookBaby and the IRS, but their clients are required to report all “titular commissions” as income on their tax returns.    We strongly suggest you discuss royalties and taxes with an accounting professional.