Tax question: self employment rate or ordinary income tax rate ?

Home Forums General Questions Tax question: self employment rate or ordinary income tax rate ?


Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
  • #34414

    Hi everyone,
    I recently came across this article about royalties and taxes for US based composers and I was hoping someone could help me. Here is the statement in question.

    “If you are currently a working musician, then royalties and placements are all taxed at the self-employment tax rate. If you are no longer working as a musician and are still receiving royalties for prior work, those are taxed at the lower, ordinary income tax rate.”
    This excerpt was taken from the following article

    Tips from an Accountant: The Best Way for Musicians to Do Their Taxes

    If this is true it could save a lot of composers a lot of taxes. Most royalties are generated from prior works but most of us are still working so it’s very confusing. Can anyone clarify, thanks


    Would appreciate a response from any US based composers who are filing taxes individually. Are any of you reporting royalty income on schedule C or schedule E ? Thank you

    Michael Nickolas

    I’ve always done a Schedule C as I’ve been self employed my entire career. As I understand it Schedule E is for passive income and not for income that you are actively involved in as an ongoing endeavor. Plus, doing a Schedule C allows you to deduct your costs of doing business.


    Thanks for your reply, Michael

Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.

Forgot Password?

Join Us