Discussion:Royalty Income S/E Tax?
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Discussion Forum Index --> Basic Tax Questions --> Royalty Income S/E Tax?
Discussion Forum Index --> Tax Questions --> Royalty Income S/E Tax?
| 14 March 2008 | |
| I have a client who is a former NFL Player who receives a 1099-Misc each year. The earnings on the 1099 are recorded as royalty payments. His prior accountant was taxing them for self employment tax. Is this correct?
Thanks in advance | |
| 14 March 2008 | |
| Depends on whether the royalties are earned as a trade or business. Not always an easy call. Someone who writes books for a living - then I am told the royalties are Schedule C. But if you happen to write one book and have a day job - I guess it is Sch E. I curse Congress every time I come upon one of these situations. | |
Death&Taxes (talk|edits) said: | 14 March 2008 |
| If this is like MLBPA royalties, they go on Sch E according to the Players' Association; I would think the reasoning is that they are split among all players......in the four cases I do each has the same amount and it is based on the income generated by MLB licensing [you know, the insignias you see on goods]. Unlike the author, the player did nothing that can be pointed out to earn this royalty. | |
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