Solved: 1099-misc royalty - other deductions/taxes/net & box #2
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New Member

1099-misc royalty - other deductions/taxes/net & box #2

I have a 1099-MISC from a small amount of mineral royalty.  On box 2, it lists I received $4,576.  However, on the top right hand corner of the 1099-MISC letter I received, it states "Other deductions = $ 226." And "Taxes = $ 197".  So it states my total Net is $4,151.  Is there somewhere I'm supposed to include these taxes/other deductions?  Am I still supposed to put the full amount of $4,576.24 in box #2 on my 1099-MISC tax form, even though I only netted $4,151 or do I just list $4,151?  If I have to list the full amount, why is that when I did not gross that amount?  All the boxes on the actual 1099- misc form are empty except #2 which lists "royalties of $4,576".  I'm in Texas if that helps.  Thank you so much for any help!
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Accepted Solutions
Employee Tax Expert

1099-misc royalty - other deductions/taxes/net & box #2

Enter the form as it is reported with the box 2 gross amount of $4,576. Then you will enter the taxes and other deductions as expenses, so that you pay tax on the net amount of $3,890. That's including the 15% depletion on the gross amount and less your other two expenses.

Enter the 1099-MISC form under the Rental Properties and Royalties section.

  • Select Federal Taxes
  • Wages & Income
  • Rental Properties and Royalties

After entering the initial royalty information, enter the taxes paid on the page, Enter Your Royalty Information. Mark the box if your form had the taxes withheld on the 1099-MISC form (Boxes 4 or 16). Continue to next page to enter depletion (15% of gross), then select More Expenses.

Continue until you reach the summary page where you can enter the taxes (if not listed in box 4) and other deductions as a misc. expense. 

See attachments.

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3 Replies
Employee Tax Expert

1099-misc royalty - other deductions/taxes/net & box #2

Enter the form as it is reported with the box 2 gross amount of $4,576. Then you will enter the taxes and other deductions as expenses, so that you pay tax on the net amount of $3,890. That's including the 15% depletion on the gross amount and less your other two expenses.

Enter the 1099-MISC form under the Rental Properties and Royalties section.

  • Select Federal Taxes
  • Wages & Income
  • Rental Properties and Royalties

After entering the initial royalty information, enter the taxes paid on the page, Enter Your Royalty Information. Mark the box if your form had the taxes withheld on the 1099-MISC form (Boxes 4 or 16). Continue to next page to enter depletion (15% of gross), then select More Expenses.

Continue until you reach the summary page where you can enter the taxes (if not listed in box 4) and other deductions as a misc. expense. 

See attachments.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

New Member

1099-misc royalty - other deductions/taxes/net & box #2

@TurboTaxPaulaM I received 1099-MISC and Box 2 has $456. I authored a book sometime ago and the publisher send me the 1099-MISC every year. Should this entered under "Rental Properties and Royalties section/Schedule E" or "Business Items/Schedule C"? Not that I have no expenses to claim for this since the book was already published back in 2009.
Employee Tax Expert

1099-misc royalty - other deductions/taxes/net & box #2

Income from creative works (artists, writers, musicians) would be considered self-employment income and be reported on Schedule C. Some would say this belongs on a schedule E if you are not 'in the business' of writing. But this royalty represents real work that you did in 2009 and differs from investment activities where one can contribute just money to a royalty activity. The topic is a confusing one and you should consult a CPA or EA for clarification.
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