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
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.