Taxes may not be the most exciting part of being an author — but they are one of the most important.
If you’re self-published, the IRS generally considers you a business owner. That means your book income isn’t just creative — it’s taxable. Understanding how taxes work early can help you avoid costly mistakes and treat your writing like a professional endeavor.
This guide breaks down how taxes for self-published authors actually work in the U.S., in simple terms.
Note: This is educational information, not tax advice. Always consult a qualified tax professional for your situation.
Do Self-Published Authors Have to Pay Taxes?
Yes — if you earn money from your books, you must report it.
The IRS treats most independent authors as self-employed individuals. That means book income is handled similarly to freelance or small business income.
This includes earnings from:
Amazon KDP
IngramSpark
Direct book sales
Speaking engagements tied to your book
Royalties and advances
Even small earnings must be reported, regardless of whether you receive a tax form.
Understanding Self-Employment Tax
One of the biggest surprises for new authors is self-employment tax.
If your net profit exceeds $400, you may owe self-employment tax, which covers Social Security and Medicare contributions.
This tax is typically around 15.3% of your net earnings, meaning your income after expenses are deducted.
For example:
$10,000 revenue
$7,000 expenses
$3,000 profit
Self-employment tax applies to that $3,000
Understanding this early helps authors price their books and plan finances realistically.
What If You Don’t Make a Profit?
Many first-time authors don’t earn a profit immediately — and that’s normal.
If your publishing expenses exceed your income, you may be able to deduct those losses against other income sources, such as a full-time job.
However, the IRS requires you to treat your writing as a real business. If it’s considered a hobby, certain deductions may not apply.
This is why professional authors approach publishing with long-term strategy and documentation.
Treat Your Writing Like a Business
One of the most important tax principles for authors is mindset: treat your work like a business.
That includes:
Tracking expenses
Keeping receipts
Separating business and personal finances
Planning future income and costs
Many authors open separate bank accounts to simplify bookkeeping and tax filing.
If you’re serious about publishing professionally, building this foundation early makes everything easier later.
Tax Forms Authors Should Know
Most self-published authors will encounter these forms:
Schedule C (Form 1040)
Used to report:
Writing income
Business expenses
Schedule SE
Calculates self-employment tax.
1099 Forms
You may receive:
1099-NEC from publishers or clients
1099-K from payment processors
Even if you don’t receive these forms, income must still be reported.
Common Tax Deductions for Authors
The good news? Many publishing expenses are deductible.
Common deductions include:
Editing and proofreading
Book cover design
Marketing and ads
Writing software
Website costs
Office supplies
Home office deductions (if eligible)
This is one reason serious authors treat publishing as an investment — many expenses reduce taxable income.
If you’re investing in professional services like editing or design, you can explore how structured publishing support works here:
https://thepaperhousebooks.com/packages-pricing/
Do Authors Need to Pay Quarterly Taxes?
Possibly.
If you expect to owe more than $1,000 in taxes, the IRS may require quarterly estimated tax payments.
This is common for:
Full-time authors
High-earning self-publishers
Authors with multiple income streams
A tax professional can help determine whether this applies to you.
Should Authors Form an LLC or Business Entity?
Many authors consider forming:
LLCs
DBAs
Sole proprietorships
While not required, structuring your writing as a business can:
Simplify taxes
Improve professionalism
Separate personal liability
If you plan to build a long-term publishing career, this is worth discussing with a CPA.
Recordkeeping: The Most Overlooked Tax Strategy
One of the easiest ways to reduce tax stress is simple recordkeeping.
Keep track of:
Sales reports
Expense receipts
Contracts
Royalty statements
Many authors use:
Accounting software
Spreadsheets
Bookkeeping apps
Organized records save time, reduce audit risk, and make filing much easier.
Final Thoughts: Taxes Are Part of Becoming a Professional Author
Taxes may feel intimidating, but they’re also a sign of growth.
If you’re earning income from your writing, you’re no longer just a creator — you’re a business owner.
Understanding taxes helps you:
Protect your income
Plan smarter investments
Avoid costly surprises
Build a sustainable author career
And if you’re planning to publish professionally, having the right guidance — both creative and operational — makes the journey far smoother.
If you’re preparing to publish and want support beyond the writing stage, you can explore your next steps here:
Publishing pathways: https://thepaperhousebooks.com/publishing-paths/
Submit your manuscript: https://thepaperhousebooks.com/submit-your-manuscript/
