indieauthorstaxes said:
Thanks for the reply.
I was just curious what other writers have done for the federal taxes in US. Like what forms they filed if indie writer and had no other job/source of income than just writing. Where they got their info and such.
Did you guys have to also send in your W2 forms for this? Does Amazon send them out?? Because I haven't gotten mine yet (do I have to specifically ask them for it? Come to think of it, BarnesAndNoble didn't send them to me either...)
If anyone can PM me who knows how Amazon handles these, and how it works if you used a pen name, etc, please contact me if this isn't the right place to discuss this, though I feel other writers doing this for the first time would also be helped by the discussion.
I can only stress, again, you need to consult with a tax professional. This question comes up regularly -- not surprisingly, at least every year around this time!
-- but the answer isn't simple. EVERYONE's situation is different. Whether you need to file, and what forms depends on so much beyond the fact of how much you made from your books. Do you have other income? What sort of income is it? Are you married? Kids? Did you keep records for expenses? etc. etc. Without looking at the whole situation, it would be inappropriate of me to advise you on anything specifically.
![:-\](/s3/kboards.com/data/smilies/undecided.gif "Undecided :-\")
I can say this: Amazon will not send you a W2. You are not their employee. You may get a 1099-MISC if they paid you at least
$600 $10* last year. You need to report your income whether you get that form or not -- as well as income from other vendors. Most likely you'll file a regular 1040 with Schedule C attached to report income and expenses from authoring. If your only income, from any source is $500 of income from selling books, you ARE required to file a return. You will likely owe no income tax, but you will potentially owe self-employment tax (social security coverage for the self-employed) depending on what expenses you are eligible to claim.
You can get some basic information from the IRS web site. Publication 334 is the Tax Guide for Small Businesses. I'd start there if you want to do some research on your own. Which, by the way, is a good idea because then you'll know what questions you need to ask!
{Disclaimer} I am an Enrolled Agent and employed by H&R Block. Any tax advice contained in this message is not intended or written to be used, and cannot be used, by any member here, to avoid any federal tax penalty that may be imposed on the taxpayer. And, yeah, I kind of need to say this any time I answer even a general question here. Basically, if they decide you owe a penalty for some reason, you can't claim you read it on the internet and expect that to save your bacon.
edit* Right. . .$10 for Royalties. I keep forgetting that -- I only have one writer client.
An important thing to ask anyone you're interviewing for the job of Your Tax Professional is whether they know the difference in how royalties are reported for an active writer vs for a retired one. Or, maybe more importantly, the difference between royalties for a writer/musician vs royalties for oil and gas wells.
As to going to a service at the mall. . . . depending on where you are H&R Block has some really quality people. 'Round here, for example -- Northern Virginia -- just about every office has at least one Enrolled Agent; many have more than that. Even the offices that are only seasonal. Now that might not be the case in every area, but the key is to ask the question -- if you're not comfortable with the experience level of the person you're introduced to, feel free to ask for someone else or ask to be referred to another office where there might be someone with more experience. If they won't do that, go elsewhere -- the two websites I gave above are for two good professional organizations with well credentialed, experienced people.
