If you are an author who has sold books through Amazon’s Kindle Direct Publishing (KDP) platform, you may be wondering if you have to pay taxes on your earnings. The answer is yes.
As a publisher, Amazon requires all authors, including nonprofit or tax-exempt organizations, to provide valid taxpayer identification in order to comply with U.S. tax reporting regulations. This means that any income you receive from KDP must be reported on your taxes.
When it comes to filing taxes, the Internal Revenue Service (IRS) requires that you report all income, regardless of the source. This includes income from KDP sales. The IRS also requires that you report any royalties or other payments you receive from KDP.
When filing your taxes, you will need to report your KDP earnings as self-employment income. This means that you will need to pay self-employment taxes, which include Social Security and Medicare taxes. You will also need to report any royalties or other payments you receive from KDP.
In addition to reporting your KDP earnings on your taxes, you may also be required to pay state taxes. Depending on where you live, you may be required to pay state income taxes on your KDP earnings.
It is important to note that Amazon is required to report your KDP earnings to the IRS. This means that the IRS will be aware of your KDP earnings and may audit you if they believe you have not reported all of your income.
Overall, it is important to remember that you must pay taxes on your KDP earnings. Be sure to report all of your KDP income on your taxes and pay any applicable taxes, including self-employment taxes and state taxes. Failure to do so could result in penalties and interest from the IRS.