Most countries tax their citizens. Lots of people complain about that, but the world would stop functioning if goverments could not charge taxes. They're used to create roads and repair bridges, among many other important tasks, so we all pay them more or less willingly. And if you've been earning money as a self-published author, you may be required to pay them as well.
Taxing Your Income
By law, you are required to give the government a certain percentage of your earnings. When you work and receive a paycheck, these taxes are automatically deducted from that paycheck. At the end of the year you may even receive a tax return from paying too many taxes throughout the year.
But when you earn income through self-publishing, taxes are not taken out because you do not receive a paycheck. You are not someone's employee; you are receiving royalties. Because this money is not taxed, legally it is labeled as self-employment income. And when you receive a self-employment income, your tax burden increases because now you have to claim that income and pay the necessary taxes.
Luckily, you only have to do this under certain circumstances. Self-employment income is only taxable if you earn more than $400 from a single source in a single calendar year. When this is the case, you must record all the income you've earned and fill out special tax forms. For example, if you earn $405 from one book you published on Amazon then you must claim this income and pay the necessary taxes. You will owe taxes on this income, roughly 15% (depending on your tax bracket and other factors like deductibles). Save those Amazon checks, and all the others, in order to maintain a record of your income. You must claim this income under law.
There are ways to lessen the tax burden you must bear, however. Money that you spend on self-publishing is deductible. Whatever you shell out for the cover and the copyright, for example, can be deducted so you pay a little less at the end of the year. My recommendation? Get professional help. Unless you understand taxes and math very well you could run into all sorts of troubles and hassles when it comes to self-employment income.