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Tax Break - For Authors! Stimulus plan...
THURSDAY, FEBRUARY 11, 2010
Posted by: Scott McMahan | more..
650+ views
If Obama wants to stimulate education, jobs, and knowledge, he ought to give authors a tax break. Writing a book (I wrote a non-fiction computer book one time) is the loser deal to end all loser deals.

If you have a regular job, and you write a book on the side, your advance is 1099 royalty income. You're taxed at the full tax rate of your job, plus you have to pay both the employee and employer FICA tax. (And state tax, if applicable.) About half your pitiful little advance is confiscated by the government. I don't know if there is a more discouraging financial deal than writing a book.

Why doesn't the government exempt authors' royalty income (at least for non-fiction books) from this outrageously discouraging tax burden?

It doesn't pay to write a book. After tax, you make pennies per hour for your work. Almost anything, even picking up cans and bottles to recycle off the streets, would pay better than creating new knowledge. Most books, outside of a few exceptional bestsellers, barely break even. Most lose money.

If Obama, or anyone, wanted to stimulate the American economy, the place to start is an exemption from taxes for book royalty income.
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