Hello There. I've searched all over the internet for someone in my similar situation and have yet to find the answer. This is regarding tax filing status for 2021. Until November 2021, I worked a full-time day job and attended graduate school as a part-time student. By choice, I left my job and am now a full-time student living off my savings. In order to supplement my income, I began writing through the KDP platform as an author. I received my first check in March, but the royalties I have received have been relatively small thus far. For 2021, I am unclear if my status as a student will require me to file my taxes as a sole proprietor or if I will be able to declare the KDP royalties as a hobby. I have no other source of income coming in at the moment and probably won't until I graduate in mid 2022. From my understanding, if I declare myself a sole proprietor I would be subject to the small business tax and to social security at the 30% rate. Should I be putting away a small bit of each royalty payment for this? Would you recommend obtaining an EIN? Or would I be able to declare this as a hobby? I do have a graduate school loan taken out, however, it may be slightly more complicated as my school is locate do not of the country. I do not qualify for many of the educational credits because of this. I understand the situation may change, yet I would like to begin researching this early so I won't be shocked next year. Thank you.
