![]() ![]() However, preparing new editions of the book and writing other books and materials reflect the conduct of a trade or business. "The IRS has ruled that an individual who writes only one book as a sideline and never revises it is not regularly engaged in an occupation or profession, and the book royalties are not considered earnings from self-employment. (4) would serve as the basis for a deduction for a SEP (simplified employee pension plan). 199A qualified business income deduction of 20% and (3) could be qualified business income for the Sec. (2) are subject to self employment taxes (2.9% + 12.4%) less the deduction for half of the SE tax In contrast, if the "royalties" are considered business income, then If the amounts received are considered "royalties" then they are subject the net investment income tax (NIIT). The treatment of royalties arising from textbooks presents several interesting issues.
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