Royalties from writing book must go on Schedule C and not on Schedule E. Royalties from land used to produce minerals such as oil and gas go on Schedule E.
I have researched this issue because I have written books on which I received royalties (such as Tax Strategies for the Self-Employed which is published by CCH Incorporated). At his salary level, he maxed out on Social Security tax. Therefore, the only self-employment tax he would pay is the Medicare tax, which has a nominal rate of 2.9 percent. He gets to deduct half of his self-employment tax in calculating his adjusted gross income.
“Tax Strategies for the Self-Employed”
Cool. I’m willing to accept you as an authority on this. :-)
I didn’t see the exact amount of royalty income, but say it was $4M. 1.45% of that is a hefty (from where I sit) $58K. I will reiterate my contention that it’s hard to picture Obama generously handing over that amount voluntarily (notwithstanding his repeatedly expressed desire to raise taxes on “the rich”). Thank you for confirming my suspicion he had no choice in the matter.
Does Campbell have a strategies page that is not on facebook?