January begins a new fiscal year. It’s also the best time to organize your tax information for last year. Whether your book has been out for more than a year, or you’re more than a year out before you finish writing your book, this is the best time of year to gather the information together for tax purposes. On the income side, identify the sources from which you have received payment. If you received royalties or an advance on royalties, you will need to file this as income because taxes have not been paid on this amount. You pay income tax on the full amount of the check or checks received during the fiscal year from royalties or an advance on royalties. Your agent or publisher will send you a 1099-MISC which you should receive in early February. If you worked as an independent contractor and someone paid you more than $600 in the past year for your work as a professional writer, than you should expect to receive a 1099-MISC early in February. If you worked as an independent contractor but were paid less than $600 in the last year, you still need to declare this as income, but don’t expect to receive a 1099-MISC form. If you worked as an employee (writer, editor, teacher, workshop leader) then social security and income tax has already been taken out of your payments. Expect to receive a W-4 which declares your income and taxes paid to the IRS. On the expense…

As a writer in the process of getting published, you may have paid more than $600 to a literary agency, editor, photographer, website designer, or book packager to work with you this past year. You can claim this amount as an expense when you file a Schedule C; it will lower how much tax you have to pay on your income. Here is the link to Schedule C   If you paid more than $600 to one agency, the IRS requires you to send a 1099-MISC form to that agency. Here is the link to Form 1099-MISC When you open the link, scroll down until you get to Copy B, the black & white form, which can be downloaded and completed (ok to file electronically as well.) Print out Copy B. Fill out your information (you are the Payer) and fill in the Recipient’s name, address and federal ID #. Put the amount you paid to this business in Box 7 – Non-Employee Compensation. Send a copy to the IRS by January 31st. If you run out of time to mail it in, you can file electronically. See below for IRS mailing address, which depends on where you live. If your legal address is located in the states below, use this IRS address:   Department of the Treasury Internal Revenue Service Center Kansas City, MO 64999 Alaska, California, Colorado, District of Columbia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota,…

It’s January and the time of year when you need to prepare your taxes or gather the information together to take it to a tax professional. Before January 31 you are required to file 1099-MISC forms for income you paid to independent contractors during the last year. If you paid more than $600 to an individual or a contractor for professional services related to the business of being an author, you need to prepare and mail this form along with Form 1096 which lists the 1099-MISC forms you filed. In order to complete these forms you need to have this individual’s W-9 form completed and on file. It includes a social security number (SS#) or an employer identification number (EIN#) for tax reporting purposes. This information is confidential and you need to keep it in a secure location like a safety deposit box. Even if you do not itemize your deductions as a professional writer, it is important to keep tax records. Even more important if you do file your income tax with more than $600 annual income from your professional writing efforts. If someone has paid you more than $600 in the past year for your work as a professional writer, than you should expect to receive a 1099-MISC early in February. If you worked as an employee and social security and income tax has already been taken out of your payments, then expect to receive a W-4 which declares your income and taxes paid to the IRS. If…