topic Re: 1099-MISC: Schedule C or E? in Business & farm

1099-MISC: Schedule C or E?

elora_c — Fri, 05 Mar 2021 13:48:32 GMT

My husband used to work as a freelance editor of technical books. He received royalties from the sales of those books. I always filed a Schedule C-EZ for this income. He now is a full time employee in a different industry (online media), but still receives royalties from those sales which is reported on a 1099-MISC as box 2 (royalties). Do I still file this on the schedule C (and pay self-employment taxes) or does it now go on Schedule E? Just to note again, he was not the author of these books.

Re: 1099-MISC: Schedule C or E?

RayW7 — Fri, 05 Mar 2021 18:48:13 GMT

If you received a 1099-MISC for royalty income, enter it under the Rental and Royalty section, and not in the Other Common income section. This will properly link the 1099-MISC with the schedule E. Enter in the Royalty Income section on the summary page. Delete the form if you entered it elsewhere.

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Where do in enter royalty income in TurboTax? Schedule E or ...

Re: 1099-MISC: Schedule C or E?

elora_c — Fri, 05 Mar 2021 20:24:58 GMT

So even though this originally was considered self-employed income, since he is no longer doing that contract work it is now considered 'normal' royalties? As opposed to self-employment royalties and subject to self-employment taxes? Thanks.

Re: 1099-MISC: Schedule C or E?

AmeliesUncle — Fri, 05 Mar 2021 22:28:34 GMT

It is still self-employment income. As you said, the original source was from self employment, and therefore so are the royalties.

Re: 1099-MISC: Schedule C or E?

ColeenD3 — Sat, 06 Mar 2021 16:25:45 GMT

Please see this answer from IreneS.

"Any royalties from intellectual property you created as part of your profession should be reported on a Schedule C. If this royalty is not from an activity you engage in professionally, you should enter it on a Schedule E."

"Royalty income from your business, including artist royalties, go to a Schedule C, although other types of royalties, for property, do go to a Schedule E."