Indie Authors, Book Covers and Taxes - 1099-MISC and 1099-NEC

Let me guess. You stopped writing long enough to buy the perfect fantasy or sci-fi book cover (or perhaps some character art) and now that it's time to file taxes, you're having to stop writing yet again to find out whether you need to submit a 1099-NEC or a 1099-MISC?

Why can't publishing books be just a bit less complicated? Or at least less time-consuming. Am I right?

book covers and taxes

I know taxes aren't the most fun time of year, and it's even less fun when you're a self-published or indie-published author scouring IRS websites trying to find a simple answer to what should be a simple question about your book cover.

And while I can't make taxes fun for you, I can at least save you time searching for this particular answer, so you can get back to writing those sci-fi and fantasy books we all love to read. 😉

Do I need to submit a 1099-NEC or a 1099-MISC for my book cover?

No. Since I only collect payments through third party payment processors like Stripe or Paypal, authors don't have to submit a 1099-NEC or a 1099-MISC when they purchase book covers or art from me. The payment processors submit a 1099-K instead to report that income.

If you were to purchase art or a book cover from me and submit a 1099-NEC or a 1099-MISC, then your payment(s) to me would be reported twice (once through the payment processor and a second time through your form) and I'd have to pay tax on the same income twice or risk triggering an audit.

IRS wording about book covers and 1099-NEC or 1099-MISC forms

self-publishing taxes

Sending a 1099-NEC or 1099-MISC is a common concern among self-published authors because the wording which makes it clear authors shouldn't submit these forms for most book cover purchases is buried in super long verbiage on the tax website. The instructions for this can be found here: https://www.irs.gov/instructions/i1099msc

To save you time, I copied the relevant sections (and bolded the most important part for emphasis) showing that you don't have to submit either a 1099-MISC or a 1099-NEC here from that same URL to help you find it quickly. Just copy a portion of the wording and do a search in the URL to verify the section is on the page this way without having to scroll endlessly to find it. 

And yes, I know it looks like I pasted the same wording twice, but they come from separate parts of that very, very long website and they refer to the two different forms.

For the 1099-NEC

Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-NEC. See the separate Instructions for Form 1099-K.

IRS website - https://www.irs.gov/instructions/i1099msc

For the 1099-MISC

Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC. See the separate Instructions for Form 1099-K.

IRS website - https://www.irs.gov/instructions/i1099msc
book covers and 1099-MISC or 1099-NEC form

Wondering what makes a book cover successful? Check out the busy indie author's guide to sci-fi and fantasy book covers. And if you're looking for fantasy and sci-fi premade book covers, custom covers, or character art, you're in the right place. 😉

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Sign up to my e-mail list here. In addition to getting early access to new premade covers before anyone else and periodic exclusive discounts, you’ll also get concise, detailed information about what makes a book cover good at its job and how to ensure the book cover you get is one that will put your book into the hands of the right readers.

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