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Author Topic: Tax Questions (US)  (Read 2167 times)

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« on: September 27, 2020, 10:34 »
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I recently learned that Envato's 1099s report income as including some of the "author fees" that they charge, and the correct way to get around that is to deduct those "author fees" as expenses on a schedule C (I think).

Does anybody know if there are other agencies that do something similar? Or is there anything else I need to watch out for? What's everything that you deduct on your schedule C?

I only started selling stock late last year (I only made $140 from Shutterstock and Adobe in 2019 so I didn't bother with a schedule C for that tax year), but now that I'm making more and I'm on more agencies I don't know what to expect for my 2020 taxes. I know it's still way early but I want to be proactive and not have any unpleasant surprises last minute.


« Reply #1 on: September 29, 2020, 21:11 »
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Or do any of you report this as royalty income on a schedule E? I'm so confused since this isn't my primary source of income.

« Reply #2 on: September 29, 2020, 23:29 »
+1
You could try adulting and contact a certified accountant in your jurisdiction.

That said, does anyone know how to replace my transmission fluid gasket on a 69 Chevy?

« Reply #3 on: September 30, 2020, 08:00 »
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Or do any of you report this as royalty income on a schedule E? I'm so confused since this isn't my primary source of income.

No.  And you can read why here : https://www.microstockgroup.com/general-stock-discussion/moving-to-the-u-s-tax-questions/msg556922/?topicseen#new

Uncle Pete

  • Great Place by a Great Lake - My Home Port
« Reply #4 on: September 30, 2020, 10:02 »
0
You could try adulting and contact a certified accountant in your jurisdiction.

That said, does anyone know how to replace my transmission fluid gasket on a 69 Chevy?

Blazer, Camaro, Kingswood, Brookwood, Townsman, Biscayne, Chevelle or something else, like a pickup truck?   

Find a CPA

« Reply #5 on: September 30, 2020, 11:16 »
0

« Reply #6 on: September 30, 2020, 12:05 »
+1
https://pocketsense.com/royalties-schedule-e-5790575.html

"You would use Schedule C, not Schedule E, to report royalties if youre a self-employed writer, songwriter or artist. The key phrase here is self-employed. You created something with the intention that it would earn you a livelihood. It's an ongoing endeavor, not a one-shot effort. Schedule E is appropriate for reporting passive income."

https://www.thetaxadviser.com/issues/2013/dec/kelley-dec2013.html

« Reply #7 on: September 30, 2020, 17:15 »
+1
... What's everything that you deduct on your schedule C?...



hair dye & haircuts

« Reply #8 on: October 03, 2020, 01:10 »
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https://pocketsense.com/royalties-schedule-e-5790575.html

"You would use Schedule C, not Schedule E, to report royalties if youre a self-employed writer, songwriter or artist. The key phrase here is self-employed. You created something with the intention that it would earn you a livelihood. It's an ongoing endeavor, not a one-shot effort. Schedule E is appropriate for reporting passive income."

https://www.thetaxadviser.com/issues/2013/dec/kelley-dec2013.html

I'm a regular W2 worker doing a completely unrelated job at a large company, which is responsible for 95% of my income. I do stock for fun and only sell it to try and earn a little extra money, which is why I find it hard to consider myself "self-employed" and is why I was giving consideration to schedule E. I'm just wondering if there are others in a similar situation and I'm wanting to know what they did.

« Reply #9 on: October 03, 2020, 07:57 »
+1
No.  Youre actively doing it, so its still a business.

« Reply #10 on: October 03, 2020, 19:36 »
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https://pocketsense.com/royalties-schedule-e-5790575.html

"You would use Schedule C, not Schedule E, to report royalties if youre a self-employed writer, songwriter or artist. The key phrase here is self-employed. You created something with the intention that it would earn you a livelihood. It's an ongoing endeavor, not a one-shot effort. Schedule E is appropriate for reporting passive income."

https://www.thetaxadviser.com/issues/2013/dec/kelley-dec2013.html

I'm a regular W2 worker doing a completely unrelated job at a large company, which is responsible for 95% of my income. I do stock for fun and only sell it to try and earn a little extra money, which is why I find it hard to consider myself "self-employed" and is why I was giving consideration to schedule E. I'm just wondering if there are others in a similar situation and I'm wanting to know what they did.

first, MS income IS passive - except for the few times we've been paid just for uploading. it's the ultimate 'one shot'! before retiring,  i also earned passive income from my online games, and reported both on sched E - the only real difference for these types of royalties (as opposed to gas&oil, etc which have depreciation, etc, etc) is that you dont pay FICA on royalties. that made a big difference for me when my primary income was royalties. but you're probably paying max FICA already, so really won't matter

wayback i confirmed this thru a call to IRS, but of course, IANAL

« Reply #11 on: October 04, 2020, 08:33 »
+1
Its passive, but that isnt the point.  Its still income subject to self employment taxes.

« Reply #12 on: October 06, 2020, 05:03 »
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No.  Youre actively doing it, so its still a business.

What if one were to completely disengage and not do it actively at all (in fact, I think my contract may prohibit it)? Still Sch C in your opinion?

« Reply #13 on: October 06, 2020, 07:57 »
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No.  All the links and reading say that if youre not actively participating in production, then it becomes royalties for the purposes of taxes.

Uncle Pete

  • Great Place by a Great Lake - My Home Port
« Reply #14 on: October 06, 2020, 10:02 »
0
No.  Youre actively doing it, so its still a business.

What if one were to completely disengage and not do it actively at all (in fact, I think my contract may prohibit it)? Still Sch C in your opinion?

No.  All the links and reading say that if youre not actively participating in production, then it becomes royalties for the purposes of taxes.

And why I pay an accountant.  ;D

According to the US Government Printing Office, The IRS Internal Revenue Code (IRC) is 13,458 pages in total.

Plus:

Treasury regulations (26 C.F.R.)--commonly referred to as Federal tax regulations-- pick up where the IRC leaves off by providing the official interpretation of the IRC by the U.S. Department of the Treasury

The authoritative instrument for the distribution of all forms of official IRS tax guidance is the Internal Revenue Bulletin (IRB), a weekly collection of these and other items of general interest to the tax professional community.

Someone would need to know and read the IRC, CFR be up to date on the IRB and then understand them and how each relates to the others.

Self employment, commission, royalty and anything in that realm, is much more complicated than payroll taxes.


 

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