# Taxes on Suspended Royalty
**URL:** https://www.mineralrightsforum.com/t/taxes-on-suspended-royalty/2953
**Category:** Oil and Gas Leasing Help
**Created:** [April 25, 2017, 8:26pm UTC](https://www.mineralrightsforum.com/t/taxes-on-suspended-royalty/2953 "2017-04-25T20:26:36Z")
**Posts on this page:** 8
**Page:** 1
### Author:  [@RE\_Dodson](https://www.mineralrightsforum.com/u/RE_Dodson)
#### Post date: [April 25, 2017, 8:26pm UTC](https://www.mineralrightsforum.com/t/taxes-on-suspended-royalty/2953/1 "2017-04-25T20:26:36Z")
Good afternoon,
My brother and I both just received a decent amount on suspended royalty in Montague County in Texas. I am trying to ballpark how much to hold back for tax purposes. 15%, 28%? 50%?
Thank you!
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### Author:  [@WV\_Mineral\_Owner](https://www.mineralrightsforum.com/u/WV_Mineral_Owner)
#### Post date: [April 26, 2017, 2:02am UTC](https://www.mineralrightsforum.com/t/taxes-on-suspended-royalty/2953/2 "2017-04-26T02:02:32Z")
I think 30% would be a good number to go by, depends on your State, et al.
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### Author:  [@Kathy\_M\_Stephens](https://www.mineralrightsforum.com/u/Kathy_M_Stephens)
#### Post date: [April 26, 2017, 2:54pm UTC](https://www.mineralrightsforum.com/t/taxes-on-suspended-royalty/2953/3 "2017-04-26T14:54:49Z")
R.E. I am no expert, but also do not forget about self-employment tax if your present job takes care of withholding out of your salary. I know some accountants say that royalties are passive income and not subject to SE tax. I am not here to start an argument. Congratulations, Kathy
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### Author:  [@Charles\_Emery\_Tooke\_III](https://www.mineralrightsforum.com/u/Charles_Emery_Tooke_III)
#### Post date: [April 26, 2017, 5:59pm UTC](https://www.mineralrightsforum.com/t/taxes-on-suspended-royalty/2953/4 "2017-04-26T17:59:59Z")
Don’t forget that you will also owe taxes to the County. Producing properties in Texas are taxed for the roads, schools, hospitals, etc.
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### Author:  [@TennisDaze](https://www.mineralrightsforum.com/u/TennisDaze)
#### Post date: [April 26, 2017, 6:13pm UTC](https://www.mineralrightsforum.com/t/taxes-on-suspended-royalty/2953/5 "2017-04-26T18:13:05Z")
Royalty income is reported on Schedule E and that is where you deduct any related expenses. It is not subject to self-employment tax as it is not classified as earned income. There is a rare exception if you declare yourself to be in the business of royalty. Working interest income is reported on Schedule C and is subject to self-employment tax. Your taxes will depend on your marginal tax rate of adding the royalties on top of your other income.
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### Author:  [@RE\_Dodson](https://www.mineralrightsforum.com/u/RE_Dodson)
#### Post date: [April 27, 2017, 1:05am UTC](https://www.mineralrightsforum.com/t/taxes-on-suspended-royalty/2953/6 "2017-04-27T01:05:44Z")
Thanks everyone. I decided to put 51% into a 182 day CD then roll that into a 90 day CD which will mature about tax time next year and return a little bit. That should give me more than enough for taxes.
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### Author:  [@James\_Marrow](https://www.mineralrightsforum.com/u/James_Marrow)
#### Post date: [May 2, 2017, 2:57pm UTC](https://www.mineralrightsforum.com/t/taxes-on-suspended-royalty/2953/7 "2017-05-02T14:57:20Z")
Tennis, you are correct. I am a CPA and couldn’t have said it better.
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### Author:  [@system](https://www.mineralrightsforum.com/u/system)
#### Post date: [August 14, 2018, 10:30pm UTC](https://www.mineralrightsforum.com/t/taxes-on-suspended-royalty/2953/8 "2018-08-14T22:30:50Z")