I own a small publishing company and occasionally publish my own books. I want to track royalty expenses on the products I've written, so my plan was to pay myself royalties, book it as a royalty expense and then issue myself a 1099 for the royalties paid, so that my taxes balance (the LLC profits offset by the royalty expense would be balanced because the 1099 would add that amount back to the profits when I report my total profits). I'm the sole owner of the LLC and it's a disregarded entity for tax purposes.
Is this appropriate? Is there another way I should handle it? Maybe use a non-posting account?