On Thu, 02 Apr 2009 17:58:33 -0700, Darren New wrote:

> Jim Henderson wrote:
>> Corporation != Non-Profit Organization, though.  I'm talking like a 503
>> (c) organization.
> 
> Sure it is. It's just taxed differently in return for not giving
> monetary benefits to shareholders.

I'll have to check with our treasurer, but I think she'd have said 
something if we had to dip into the bank accounts.

>> But if you publish 10 different books, each through a different
>> publisher, and only make $500 from each one, then it's not reportable
>> income and you don't owe taxes on it.  At least that's my
>> understanding.
> 
> I'm pretty sure you owe tax on it even if it's not reportable.
> Otherwise, you wouldn't pay income tax if you had 10,000 customers a
> year each buy $20 of stuff from you.

That's sales tax, not income tax.  From a personal income tax standpoint, 
the law states that < $600 isn't taxed (at the federal level, state laws 
may differ).

>>> And if you're actually a corporation, you certainly have to report all
>>> your payments even if they didn't get reported.
>> 
>> But again, corporation != non-profit.
> 
> Yes, it is, in the US.  Or at least it can be, and usually is. Actually,
> I'm even pretty sure that in most states, *first* you set up the
> corporation, then you show the bylaws to the IRS and they decide whether
> you can be counted as a non-profit.

I don't know that it was the IRS that we had to talk to - seems it was 
someone here in the state of Utah offices, not the feds.

> Granted, there may be different sets of fees for NPOs and C-Corps or
> S-Corps, but you still need directors, corporate books, separate tax
> filing, and so on.
> 
>> Then you're probably in a better position to comment than me. ;-)  I've
>> only taken the payments, but what I've written is my understanding
>> based on my experiences.
> 
> Did you take them as an individual, or a corporation, or what?

Individual.

> One payment of $500 to an individual will likely not get you in trouble.
> You're supposed to report it, but there's no proof.

The 1099 that the publisher submitted clearly stated that there was no 
tax liability that they reported, and did include the figures IIRC for 
the amount of royalties.

Jim

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