If you receive a 1099-MISC with income in box 2, you should enter it as a royalty. Here is how to do that:
- Use the search box toward the upper right corner to search for 1099-MISC.
- Enter your 1099-MISC information.
- On the screen titled, Source of 1099-MISC Income, you can select Investment income from property you own, or Royalty income from your business, including artist royalties or operating a natural resources business (Schedule C) If you are no longer in the business of writing, you should pick the first one. This will put the income on Schedule E.
If you report it as hobby income and the amount is more than $400, you are likely to get a letter from the IRS about it.
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