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Tax Reporting for Book Royalties

Posted on: January 6th, 2014 by Publisher Services

Book royalties are taxable income and should be included on your tax returns for money received greater than $10.  The United States Tax Code requires publishers to report royalties paid in excess of $10.00 in Form 1099-MISC. 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 will 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.  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. We strongly suggest you discuss royalties and taxes with an accounting professional.


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.