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Tax.appeal.168, Tax Accountant
Category: Tax
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Experience:  3+ decades of varied tax industry exp. Tax Biz owner
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Hello, I just got paid half of the book advance I am getting

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Hello, I just got paid half of the book advance I am getting for a book I am writing and which will be published in 2013. I will get the rest of the advance in 2012. I was wondering how much taxes I would have to pay on this? The total amount I will get is 108k. thanks Kim
Submitted: 6 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 6 years ago.
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.

The amount that you rec'd this year will be taxable for tax year 2011. The amount of tax that you will have to pay on that amount depends on the tax bracket you fall under. There are 6 tax brackets, 10%, 15%, 25%, 28%, 33%, and 35%. Your tax bracket is determined by the amount of income earned and filing status. to better assist you, would you mind answering the following questions for me?

1) How much was the advance that you just rec'd?
2) What is your filing status?
3) How much do you expect to earn this year?

In regards XXXXX XXXXX portion of the advance due to be rec'd in 2012, you will be taxed on that for tax year 2012.

Customer: replied 6 years ago.
Hello Angela
thank you for your answer so far.
I received 53,000 this year as an advance. I will earn around 100k this year. I file as a single person with no dependants.
thank you
Customer: replied 6 years ago.
Just to clarify that I will earn 100k on top of the 53k advance.
Expert:  Tax.appeal.168 replied 6 years ago.
Hello again,

Based on your earnings of $153,000, you fall under the 28% tax bracket for federal, and for state, you fall under the 8.5% tax bracket.

Federal taxes (28%) on $153,000 = $42,840.00
State taxes (8.5%) on $153,000 = $13,005.00

Federal/State Combined (not including SE Tax): $55,845

Your self employment tax will depend upon how much of your income is self employment income. If the entire $153K is self employment income, then your initial self employment tax (13.3% for TY 2011) will be $20,349 However, 1/2 of this amount is credited back to you as a business deduction. If only the $53,000 is self employment, then you SE tax will be, $7,049.00
Customer: replied 6 years ago.
Thank you Angela. One more question- I don't understand what the Self Employed tax. I have to pay more taxes if I'm self employed??
I am employed full time that's where I get my 100k salary. The 53k is paid to me by the publisher of my book, based on my contract with them for this project.
Expert:  Tax.appeal.168 replied 6 years ago.
Hi Kim,

In brief, self employment tax is the social security and medicare tax (for people who are self employed, or considered independent contractors) pay. A person pays social security and medicare taxes as an employee, and they pay it when they are self employed. The difference is that when you are an employee, your employer pays 1/2 and you pay 1/2.

BTW, I am in the final stages of having a self help guide published that I recently wrote. Pretty exciting stuff.


Now to the meat of the matter, understanding is that the $100K income is reported to you on a W2...correct? If so, this income is not subject to self employment tax. As you are more than likely an independent contractor (author), and you will receive a 1099 for the 53K, this is what is considered self employment income. The 53k is what you would have to pay SE tax on, which initially would be $7.049.00, but 1/2 of that is credited back to you as a business deduction. So when the ink dries, your SE tax on the $53k is $3,524.50.


You will report the 100K on Line 7 of the Form 1040, wages, salaries, etc. For the 53k, you will need to file a form Schedule C (Profits/Loss From A Business). On this form you will show the 53K as gross receipts, and you can deduct expenses relating to the writing the book on the Schedule C. I hope this clarifies matters for you.

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