Ordinary income is just that — money earned for the work you do. For songwriters, the money you earn from royalties is considered ordinary income. The tax rate you pay depends on how much you make, from as low as 10% of taxable earnings to as high as 39.6%.
As tempting as an advance offer might be, though, it is not free money — advance deals all come with strings attached that could be harmful to your professional career and financial life if you’re not careful and clear-eyed about the process. Here’s some info to help you decide whether an advance is worth it for you to take.