Self-employment tax on book royalties

An author’s royalties for book sales are self-employment income for which self-employment tax is owed. In one case, a well-known crime fiction writer argued that additional amounts paid for her name and likeness in the publisher’s promotions was investment income (a payment for an intangible assets beyond her trade or business as an author) that should not be subject to self-employment tax. The Tax Court didn’t buy her argument. Her brand is part of her trade or business as a writer, so all of the royalty payments (none of which were allocated by the publisher for the use of her name and likeness) were self-employment income.