My client is an employee. As part of his job he develops new fonts. Every year he gets a W-2 and a 1099 for royalties. These royalties are connected to his W-2 job so I report them on Schedule E. His AGI is 100k. In 2018, wlll he get the 20% deduction on the royalty income?
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Good question. I have the same situation, although the compensation is paid via 1099MISC since he is an independent contractor and does consulting work for others as well. Then he gets a separate 1099 for the royalties. As far as I know, the 20% deduction was only for "business" income which I assumed was for Sche C's, 1120-S, and 1120's, maybe partnerships, but not royalties? I confess I have not studied up on this as yet.
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