A Publisher's Conversation with Authors: IRS and Royalties
It is Tuesday. Monday's madness is over, and Wednesday will take us over the hump, so Tuesday it is--for some serious discussion with authors. Tuesday talks mean to address authors in waiting and self-published authors who would like to go a more traditional route or who would at least like to take their steps with a publisher by their side.
Today's post attempts to answer royalties and the filing of taxes -- yes, it is that time of year!
What to File
If you received more than $600 in royalties last year (2023), your publisher is required to send you a 1099 with the amount of royalties paid listed. The 1099 is due by January 30. Chances are that your publisher did not take out taxes from your royalties. That is just not "a thing," so you will have to figure out what you owe the IRS from your earnings.
If you received less than $600 in royalties last year (2023), your publisher will not send you a 1099. However, you are still required to report all royalties received to the IRS.
When to File
This is the part that confuses authors. Essentially, when you file taxes in April 2024, you pay taxes on money you received in 2023. That includes royalties paid out to you in 2023. These generally will have come from book sales from 2022; those are aggregated at the end of the year so as to include all sales, and royalty statements go out in 2023 for 2022 sales in accordance with the publisher's schedule. Any royalties "earned" in 2023, i.e. any book sales made in 2023, will not likely have been paid in 2023. Most commonly, royalties on 2023 book sales will be paid out in 2024 (and reported to the IRS in 2025).
Bottom line: Report royalties and pay taxes on money RECEIVED in 2023.
See more Publisher Conversations with Authors HERE.
Learn more about publishing from an acquisitions editor -- how to get your book proposal accepted, why proposals are turned down/accepted, and how to find the right publisher for your book. On special sale for $5 while inventory lasts at MSI Press webstore. Also available as an e-book and an audiobook.
The Tuesday talks reflect real discussions between the management of MSI Press LLC and our own authors or those would-be authors who come through our doors but don't make the cut--yet. If you have a topic that you would like addressed, leave the question in the comment section. Chances are, in our 18 years of publishing first-time and experiences authors, we have had a conversation with one of our authors that we can share with you.
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