Yes, if you report your Royalties as self-employment income, you have to pay self-employment taxes but you can deduct related expenses.
You may not have a choice on how to report your Royalties. Please see the definitions below.
Royalty income from your business includes income from natural resources that you extract from your property as well as royalty payments from intellectual property that you created as an inventor, writer, artist, etc. This goes on Schedule C.
Investment income from property you own is for natural resources extracted from your property by a third party who leases your property. It also includes royalties from intellectual property if you didn't create the intellectual property yourself. This will go on Schedule E.
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