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jen2016
New Member

Does my partner need to file a schedule c if they made $15 in royalties from selling two books?

in the online version of TT it did not give me an option for box 2. In the desktop version it did and created a schedule C and schedule C-EZ. Do those need to be filed with the IRS if $15. was made and $4. was paid in federal taxes?
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MargaretL
Employee Tax Expert

Does my partner need to file a schedule c if they made $15 in royalties from selling two books?

No - your partner doesn't need to file Schedule C if he/she is NOT in "business" of writing but I recommend that he/she does.  A non- match of 1099-MISC data entry may trigger a correspondence with the IRS, and I'm not sure it's really worth not filing Schedule C for $15. Also, since you mention two books... he/she may be in "business" ...

It is taxable income no matter the amount... but if he/she is not in business of writing, you can enter income as line 21, form 1040, but again... the 1099-misc won't match IRS's data entry...

And you can enter tax withheld in box 4, you should have that there.


edited 3/19/2017

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4 Replies
MargaretL
Employee Tax Expert

Does my partner need to file a schedule c if they made $15 in royalties from selling two books?

No - your partner doesn't need to file Schedule C if he/she is NOT in "business" of writing but I recommend that he/she does.  A non- match of 1099-MISC data entry may trigger a correspondence with the IRS, and I'm not sure it's really worth not filing Schedule C for $15. Also, since you mention two books... he/she may be in "business" ...

It is taxable income no matter the amount... but if he/she is not in business of writing, you can enter income as line 21, form 1040, but again... the 1099-misc won't match IRS's data entry...

And you can enter tax withheld in box 4, you should have that there.


edited 3/19/2017

View solution in original post

jtax
Level 9

Does my partner need to file a schedule c if they made $15 in royalties from selling two books?

Careful with the  $400 number. I think you might be confusing the general requirement to file a 1040 if your NET self-employment income is $400 or more even if your other income is below the filing threshold.

I do not think there is any law that says you don't have to report GROSS income < $400. If I'm wrong could you please provide a citation to the statue or regulation.
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MargaretL
Employee Tax Expert

Does my partner need to file a schedule c if they made $15 in royalties from selling two books?

You are correct; I'm not confusing the amount but I should have phrased it a little better...
jtax
Level 9

Does my partner need to file a schedule c if they made $15 in royalties from selling two books?

Ok. The thing to note is that this a general filing issue. And the $400 is net not gross. If  one is already filing because of other income you must report even $15 of income somewhere (other income, schedule C, schedule E).  If one doesn't have enough other income to have to file, the $15 will not create a filing requirement  (unless one is very close to the thresholds).
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