Not cashing checks (as mentioned above) does nothing for you. Well, other than making your bank account smaller than it could be... :-)
I was going to answer this myself, but instead will link you to someone who already answered it:
http://www.bankrate.com/brm/itax/tax_adviser/20071011_royalties_tax_a1.aspThe relevant part:
***You generally report royalties in Part I of Schedule E (Form 1040), Supplemental Income and Loss. However, if you are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C. The significant difference between reporting royalty income on Schedule C and Schedule E is that Schedule C income is subject to the dreaded 15.3 percent self-employment tax.
In order for royalties to be considered self-employment income, the recipient has to be considered regularly engaged in that business or profession. Revenue Ruling 68-498 provides the following example, which should help you contrast your situation:
"If an individual writes only one book as a sideline and never revises it, he would not be considered to be 'regularly engaged' in an occupation or profession and his royalties therefrom would not be considered net earnings from self-employment. However, where an individual prepares new editions of the book from time to time, and writes other books and materials, such activities reflect the conduct of a trade or business, the earnings of which would be subject to self-employment tax."***
You report on Sch E, which is KIND OF like Sch C except for rental property and royalties. So yes, you need a new form.
Solutions? Use a different program. I've heard good things about TaxAct.