Should I hire a TX CPA familiar with MR revenue to do my taxes. I live in Michigan
Welcome to the forum. If you are a simple royalty owner, then you may not have to use a TX CPA. If you actively participating, then you may need more expertise for the more complex billing and tax consequences. Michigan does have oil and gas so you may be able to find a CPA familiar with the business. You need someone to put royalties in the correct schedule and file for the correct depletion-percentage or cost.
There are some other posts regarding this subject. Use the magnifying glass to search for “CPA”.
Thank you for responding.
What is the difference/definition of a simple royalty owner vs. being (an) actively participating (royalty owner?)
I will search under CPA
An add on question:
My revenue statement has a column heading that states my monthly GROSS amount. It has a column titled TAX and a column heading NET amount: Gross minus Tax = Net. The Net figure is the dollar amount of my revenue check.
What are these deducted taxes?
Are they applied as a pre-payment?
Are they a county tax? State tax? Or federal tax?
Appreciate your time.
Most people are just royalty owners under a lease, receive a 1099-Misc and will report on Schedule E. If you received a 1099-NEC, then you are a working interest (unleased mineral owner) and that is reported on Schedule C. The tax is Texas severance tax which is deductible on Schedule E (or Schedule C). Operator pays and deducts from all royalty owners. Generally it is 4.6% of oil sales and 7.5% of gas sales. If any portion of the tax is federal or state withholding tax, then that would be noted on the 1099 form.
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