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Audible/ACX’s New Tax Reporting Policy: What Authors Should Know

Beginning with tax year 2021, authors who publish their own audiobooks on Audible’s Audiobook Creation Exchange (ACX) and use ACX producers must now declare the audiobook producers’ portions of the royalties as income. Those payments can then be deducted as business expenses when they file their taxes. This is because Audible/ACX now reports all net earnings from ACX audiobooks on the authors’ 1099-MISC forms, including the earnings it paid over to producers, as the authors’ royalty earnings. It has also stopped issuing 1099-MISCs to producers and instead now issues 1099-Ks to producers that meet the income threshold.

With these new accounting practices, Audible/ACX is treating the payments it makes to voice actors, audiobook producers, and studio pros (collectively referred to as “Producers” in the agreements) as part of the royalties payable to authors (referred to as “Rights Holders” in the agreements). This decision is based on the distinction that it is the authors, not Audible/ACX, who hire the producers and owe them a share of their own royalties as compensation for recording the book. The new structure makes clear that Audible/ACX is limiting its role to that of a third-party payment settlement service. This is despite the fact that Audible/ACX makes the producers’ services available to authors, sets the terms of that engagement (a 50/50 royalty split), and sends payment to the producers.

When authors first learned of this change, many were concerned that, although they were only paid their half of the royalties, they would be liable for taxes on the entire amount reported on their tax forms from Audible/ACX. Further, it was unclear how rights holders could deduct the amounts paid to producers as business expenses. There were also questions about how to determine the amount paid to producers and whether authors would be required to issue tax documentation (such as 1099-MISC forms) to producers.

The Authors Guild has discussed these issues with Audible/ACX as well as an independent tax advisor. We are sharing the feedback we received below in order to help authors navigate their taxes in light of the changes. Audible/ACX has also expanded their tax FAQs with new information specifically addressing our concerns.

Are authors liable to pay taxes on the entire earnings reported on their 1099-MISCs, including amounts paid out to producers?

No. Authors can write off producer’s shares as a business expense. Please contact your tax advisor for more information. 

Authors can find their net and gross earnings, the amounts paid to producers, and documentation of those amounts (as support for the business expense deductions) through their Audible/ACX dashboard. Specific directions on how to locate this information can be found on the Audible/ACX FAQ page.

Do authors need to issue 1099-MISCs to producers?

No. Authors do not need to send separate 1099-MISC forms to producers. Producers will get a 1099-K form from Audible/ACX reflecting their earnings. Producers will separately report their earnings from the Royalty Share program on their taxes.

Audits

Authors should download and keep all financial information related to their earnings from the Audible/ACX dashboard. Authors should also consult their tax advisors to ensure they have obtained everything needed from the dashboard for their records. The Authors Guild is discussing ways to streamline the process next year so that authors can easily retrieve all necessary documentation from Audible/ACX. This may take the form of a letter issued by Audible/ACX along with the 1099-MISC form that breaks down the amounts paid to producers vs. rights holders, but that is not yet confirmed.