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Investors & landlords
If you are/were in the business of being a writer and writing books during the tax year, then you report your income and expenses on Schedule C. As long as you are actively pursuing your writing business, your income (including royalties for past works) is reported on Schedule C.
Once you
are no longer actively writing, but you are still collecting royalties for your
past works, your royalties will then be reported on Schedule E.
If you are currently in the business of writing, use these steps to go to the section of your return to enter your business income and expenses on Schedule C:
- On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
- This opens a box where you can type in “business income, self-employed” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
- The search results will give you an option to “Jump to business income, self-employed”
- Click on the blue “Jump to business income, self-employed” link and enter your information
If you are no longer in the business of writing and you only receive a royalty, then it will be reported in the Rental Properties and Royalties section of TurboTax. Use the following steps to go directly to that section of your return:
- On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
- This opens a box where you can type in “royalties” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
- The search results will give you an option to “Jump to royalties”
- Click on the blue “Jump to royalties” link
Skip the first question or so because they will pertain to rental properties and not royalties. You will come to a screen titled, “Is This a Rental Property or Royalty?” where you can choose Royalty. You will need to enter a short description for the type of royalty and include an address for the royalty. Use your own address if the royalty is not associated with an actual property address (such as with a property lease or mineral rights). Continue moving forward until you get to a summary page for the royalty. Here you can select Start or Update beside Royalty Income to enter the income amount.