How do I report book royalties for tax purposes?
"(Insert the usual disclaimer that I'm not any sort of tax professional; I'm just a random guy on the Internet who occasionally looks through IRS instructions for fun. Then again, what you're doing here is asking random people on the Internet for help, so here goes.) The gigantic book of ""How to File Your Income Taxes"" from the IRS is called Publication 17. That's generally where I start to figure out where to report what. The section on Royalties has this to say: Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. In most cases, you report royalties in Part I of Schedule E (Form 1040). However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C or Schedule C-EZ (Form 1040).  It sounds like you are receiving royalties from a copyright, and not as a self-employed writer. That means that you would report the income on Schedule E, Part I. I've not used Schedule E before, but looking at the instructions for it, you enter this as ""Royalty Property"". For royalty property, enter code “6” on line 1b and leave lines 1a and 2 blank for that property. So, in Line 1b, part A, enter code 6. (It looks like you'll only use section A here as you only have one royalty property.) Then in column A, Line 4, enter the royalties you have received. The instructions confirm that this should be the amount that you received listed on the 1099-MISC. Report on line 4 royalties from oil, gas, or mineral properties (not including operating interests); copyrights; and patents. Use a separate column (A, B, or C) for each royalty property. If you received $10 or more in royalties during 2016, the payer should send you a Form 1099-MISC or similar statement by January 31, 2017, showing the amount you received. Report this amount on line 4.  I don't think that there's any relevant Expenses deductions you could take on the subsequent lines (though like I said, I've not used this form before), but if you had some specific expenses involved in producing this income it might be worth looking into further. On Line 21 you'd subtract the 0 expenses (or subtract any expenses you do manage to list) and put the total. It looks like there are more totals to accumulate on lines 23 and 24, which presumably would be equally easy as you only have the one property. Put the total again on line 26, which says to enter it on the main Form 1040 on line 17 and it thus gets included in your income."
I am not an accountant in any way, but I can't imagine needing to report that to the IRS. It's not income and has probably already been taxed when it was earned/received. You're not moving it from an untaxed (Roth) retirement account to a taxed one, or vice versa. You do actually have some profits (whatever is left from donations). The way it goes is that you report everything on your Schedule C. You will report this: Your gross profits will then flow to Net Profit (line 31) since you had no other expenses (unless you had some other expenses, like paypal fees, which will appear in the relevant category in part II), and from line 31 it will go to your 1040 for the final tax calculation. "I'm not sure what the situation is in Canada, but in the US, the IRS does not look kindly on people overvaluing donations of used goods. The rule is obviously abused quite a bit, but that doesn't mean it's legal! Different used books have different values, usually depending on supply and demand, and there are online databases that make it easy to check the value of a book using a barcode scanner. If you took a book to a used bookstore and they didn't want to buy it, that's because supply greatly exceeds demand... it might be last year's bestseller, for example. In this situation, donating the book to charity and claiming that the book is ""worth"" more than it's actually worth is really nothing more than cheating on your taxes. You may or may not get caught, but it's certainly not the intent of any tax code to give people a break on their taxes for donating worthless books to a charity which will inevitably just have to recycle or shred them." "No matter what you do, the question of ""what is income"" is *always* going to be an extremely complex question.   To use this particular example, is paying a royalty fee to an external party a legitimate business expense that is part of the cost of doing business and which subtracts from your ""income""?" "You can report it as ""hobby"" income, and then you won't be paying self-employment taxes. You can also deduct the blog-related expenses from that income (subject to the 2% limit though). See this IRS pub on the ""hobby"" income." I received a $2,000 bonus... Gross Income is income from whatever source derived, including (but not limited to) “compensation for services, including fees, commissions, fringe benefits, and similar items.”  Adjusted Gross Income is defined as gross income minus adjustments to income.  My question is, must I still report this money on my tax return and if so, how? Yes, and it would be on line 21 of your 1040 with supporting documentation. Are these legal fees deductible as an expense, and where would I list them? Yes, you would aggregate your deductible expenses and place these on your Schedule A. Instructions here. Good Luck. Edit: As Ben Miller pointed out in the comments, the deduction would be placed in either line 23 or 28 depending on the nature of the attorney (investment related or not). "Here's a very basic MySQL query I put together that does what I want for  income/expense report. Basically it reports the same info as the canned income/expense report, but limits it those income/expenses associated with a particular account (rental property, in my case).  My main complaint is the output ""report"" is pretty ugly. And modifying for a different rental property requires changing the code (I could pass parameters etc). Again, the main ""issue"" in my mind with GnuCash income/expense report is that there is no filter for which account (rental property) you want income/expenses for, unless you set up account tree so that each rental property has its own defined incomes and expenses (i.e. PropertyA:Expense:Utility:electric).  Hopefully someone will point me to a more elegant solution that uses the report generator built into GnuCash. THanks! SELECT a2.account_type , a4.name, a3.name, a2.name, SUM(ROUND(IF(a2.account_type='EXPENSE',-  s2.value_num,ABS(s2.value_num))/s2.value_denom,2)) AS amt FROM    (     SELECT  s1.tx_guid     FROM    gnucash.accounts AS a1         INNER JOIN gnucash.splits AS s1 ON s1.account_guid = a1.guid     WHERE   a1.name='Property A'         ) AS X     INNER JOIN gnucash.splits s2 ON x.tx_guid = s2.tx_guid     INNER JOIN gnucash.accounts a2 ON a2.guid=s2.account_guid     INNER JOIN gnucash.transactions t ON t.guid=s2.tx_guid     LEFT JOIN gnucash.accounts a3 ON a3.guid = a2.parent_guid     LEFT JOIN gnucash.accounts a4 ON a4.guid = a3.parent_guid WHERE   a2.name <> 'Property A' # get all the accounts associated with tx in Property A account (but not the actual Property A Bank duplicate entries.         AND t.post_date BETWEEN CAST('2016-01-01' AS DATE) AND CAST('2016-12-31' AS DATE) GROUP BY a2.account_type ,a4.name, a3.name, a2.name  WITH ROLLUP ; And here's the output. Hopefully someone has a better suggested approach!" "You report it when the expense was incurred/accrued. Which is, in your case, 2014. There's no such thing as ""accounts payable"" on tax forms, it is an account on balance sheet, but most likely it is irrelevant for you since your LLC is probably cash-based. The reimbursement is a red-herring, what matters is when you paid the money." I think the IRS doc you want is http://www.irs.gov/publications/p550/ch04.html#en_US_2010_publink100010601 I believe the answers are: It should be reported as Miscellaneous Income. Congratulations for wanting to report this income. You only need to report INCOME to the IRS. Money which you are paying to a landlord on behalf of someone else is not income. "If it's work you'd be producing specifically for this organization, that would not be deductable. Per Publication 526, Charitable Deductions, ""You can't deduct the value of your time or services, including: … The value of income lost while you work as an unpaid volunteer for a qualified organization."" On the other hand, if you were say an author of a published book or something (not specifically written for this organization), you could donate a copy of the book and probably deduct its fair market value (or perhaps only your basis, if it's your business's inventory)." Such activity is normally referred to as bartering income. From the IRS site - You must include in gross income in the year of receipt the fair market value of goods or services received from bartering. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit from Business (Sole Proprietorship). If you failed to report this income, correct your return by filing a Form 1040X (PDF), Amended U.S. Individual Income Tax Return. Refer to Topic 308 and Amended Returns for information on filing an amended return. "I think you're on the right track. Your #2 journal entry is incorrect. It should be (I usually put the debit entry on top, but I followed your formatting) I'm assuming your employer uses an accountable reimbursement plan (reimbursing you when you turn in your payment bill/receipts). This is not salary. Reimbursements under the accountable plan in the US are not taxed as income. If you think about it though, ""phone expense"" isn't really your phone expense. So, instead of #1 entry, you could make an account receivable, or other current asset account, maybe call it Reimbursables - cellphone, and debit this account, and credit your cash account. When you receive the $30 back, you will reverse the entries on the day of payment. If you do it this way, you should be able to see a list of receivables outstanding (I'm not too familiar with GNUCash but I'm sure it has this type of report)." Any such amount has to be reported by Skrill and the Bank to RBI. As long as your earnings are legitimate and you are paying the taxes you shouldn't be worried. If its for services rendered, you would have a contract and / or invoice ... ie some paper work. It is important to keep the paper work in order.