Honoraria and speaker fees are compensation that organizations pay to reimburse speakers for giving an address. They can vary from nothing to more than $100,000 for in-demand speakers such as former President Bill Clinton or former New York City Mayor Rudy Giuliani. Regardless of the size of the fee, they share one common feature: They're taxable, just like many other forms of income.
Since income from honoraria and speaker fees is taxable, organizations that pay them have to report them to both the speaker and to the Internal Revenue Service on a 1099-MISC form. The IRS generally only requires organizations to send out a 1099 form if the honorarium is $600 or more. However, just because a speaker doesn't get a 1099 doesn't mean the fee doesn't need to be reported as income.
Tax Treatment of Honoraria
Since honoraria are considered taxable income, recipients have to pay regular income tax on their total income from speaking. Usually, the honorarium or speaker's fee is reported on Schedule C, where expenses also are deducted. In addition to income tax, honoraria are considered self-employment income and can also be subject to self-employment tax.
When a speaker earns an honorarium, he can write off any expenses he incurs to earn the income. For instance, he can deduct the cost of his unreimbursed plane tickets and lodging. Other costs, like having printed materials for the speech, can also be deductible. For a speaker who has other expenses -- like maintaining a website for a speaking business or a cell phone for business use -- these may also be deductible. For instance, if a speaker earns a $3,000 honorarium but spends $1,100 to get to the speech, $200 on materials and $500 on a website to advertise his availability to speak, only the remaining $1,200 would be taxable.
Honoraria and State Taxes
When a speaker travels out of state and earns a speaker's fee, it can create an additional level of complexity for taxation purposes. Many states consider a speech or other performance given in their borders to represent a "nexus" in the state that entitles them to claim taxes against the income the speaker earns. A speaker who travels to multiple states could end up having to file multiple state tax returns and to deal with paying taxes in all of those states.
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