Author Topic: Royalty Shares and 1099s?  (Read 225 times)  

Offline CEMartin2

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Royalty Shares and 1099s?
« on: February 13, 2018, 05:12:17 AM »
I'm working out a royalty share with someone to work with me on some books--similar to the system ACX uses for their narrators. But it got me wondering... will I have to issue them a 1099-C at the end of this year?

Has anyone done this with a co-author/cover designer/narrator, etc. ?

Offline BillyDeCarlo

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Re: Royalty Shares and 1099s?
« Reply #1 on: February 13, 2018, 07:28:31 AM »
I think the threshold is whether you paid them more than $600. A few of my non-fiction coauthors crossed that last year and I had to go to an online 1099 form generator and did it pretty easily and inexpensively. Or just get the blank paper forms, fill them out, and mail them to the person and IRS.
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Online LilyBLily

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Re: Royalty Shares and 1099s?
« Reply #2 on: February 13, 2018, 08:08:42 AM »
It's not a 1099-C; that's Cancellation of Debt. It's a 1099-MISC.

irs.gov has all the answers.

Many small publishers issue 1099-MISC forms for extremely small amounts. I even got a D2D 1099-MISC this year for $2.97. Unnecessary.

Online PhoenixS

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Re: Royalty Shares and 1099s?
« Reply #3 on: February 13, 2018, 08:18:52 AM »
If you're paying them as a service provider, the threshold is $600. If you're offsetting your royalty profit, and calling their earnings a royalty share, then the threshold is $10.

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Re: Royalty Shares and 1099s?
« Reply #4 on: February 13, 2018, 08:35:35 AM »
What Phoenix said.

Hopefully, you have gotten your EIN from the IRS, otherwise you will have to use your social security number on the 1099. You should also make sure to get the W-9 from the other party regardless of whether you think you will hit the threshold or not. It is easier to get that stuff on the front end than trying to get it later on. And keep them in a secure location, because they include the other party's social security number.

And, of course, talk to a tax professional who can help you make sure you are doing everything correctly in your state as well as on the federal level.

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