I read the Sedo TOS and it says they don't withhold tax off your earnings. How do I pay then? Do I pay at year's end or do I pay estimated taxes at fixed times throughout the calendar year? Do I need a tax adviser if I'll be using several souces of revenue (Adsense, Amazon, eHow, Chitika and Sedo maybe)? What iabout my withholdings if I earn less than the minimum $400 for self-employed after the year? I have been reading up on it but the info is still confusing to me. I just want to be prepared before I start anything.
hey where will you pay this ? to whome to bank or other i will suggest you to pay as you are working for normal company and its fine
I guess I'd be defined as "independent contractor" by eHow, Google and all. I was just asking, how do people pay their taxes on Internet-derived reenue?
USA point of view: It depends on the amount on your Internet earnings. If you have a 9-5 type job with withholding taken out of your regular paycheck you may be able to adjust withoulding tax to cover you Internet earnings. Otherwise you may need to pay quarterly. You can obtain quartlerly payment forms through the IRS site online.
Yes, Smyrl. USA point of view. I'm a legal permanent resident here and I'm new to IRS tax laws here. I just want to make sure I pay my taxes and do everything right. My revenue will come from click programs like Chitika and AdSense, affiliate programs like Amazon and paid writing like eHow. AdSense withholds tax by default, so I guess this means I don't have to pay anything all year and just file income tax return come tax season? What about Sedo domain parking and Amazon? Sedo doesn't withhold tax and neither does Amazon I think. Do I estimate the taxes I owe and pay quarterly online then? Is that how you do it, if you're into affiliate marketing and targeted ads stuff? I don't expect to make a lot of money in my first year. May not even have to file if it's very small. But I want to be sure. Thanks a lot!
I am not into affiliate marketing so someone else can advise you better than I. You might want to look at the following site http://www.wwwebtax.com/deductions_z_other/standard_deduction.htm. It appears that if you are single, you may earn $5150 without incurring any tax liability. For any amount over that you will be taxed. You should probably visit an IRS office in your vicinity for help. From the 2008 tax table If you are single with no children and had an adjusted gross income of 5K (meaning total earnings of $10,5150) your tax liability was $503. If adjusted gross income was 10K (15,150 - 5150) Your tax was $1103 See www.irs.gov/pub/irs-pdf/i1040tt.pd for 2008 tax table.
I just want to add that whether or not you end up owing taxes, a tax return is required if you are making combined income from all sources of (I think) $600. Virtually everyone needs to complete an income tax return.
Google will send you a tax form also if something is under i believe 10,000 it doesn't need to be reported to the IRS by the company but I would report it when you fill out your taxes at your tax office.
Thank you all. I understand that Google will send us a paper if we make over or at least $600 a year. But I'm just confused because in some places they say "If you make at least $400 as self-employed, you need to file income tax." Then they say in other places "If you expect to owe less than $1,000 after withholdings and deductions, you don't need to pay estimated tax." And then there are standard deductions worth several thousand dollars, and more if one is married (like I am). OK, dumb question but what if I earn say $2,000 a year from my Internet actitvities. If I choose to avail of the standard deduction, say $5,000 if single or $10,000 if married (though of course I'm married), what does that mean? Does it mean I owe nothing, a negative number? But I should file income tax return anyway (even if I wind up owing nothing) Anyway I just signed up with Sedo. They say they'll issue payment for every $20. I guess I won't claim it until I know what to do. If I don't expect to pay a $1,000 or more I'll just pay lump sump come April....
You are required to file a tax return if you have net self-employment income of $400 or more. This is regardless of whether or not you will wind up owing taxes. There is a requirement for the company paying you to issue a 1099 when payments made to you total $600 or greater during the year. If you only receive $500, you still have to report it. If you did not have any self-employment income last year, you are not required to make estimated deposits.
Thank you, mjewel. Very good explanation. I appreciate it! As for inaccurate info: well, that's what all the contributors are here for. So there's always someone to correct a mistake. I have sent e-mails anyway and will consult with IRS as well.
Unless the government asks for it, dont pay taxes earned through internet sources of income. Internet is global in nature, and the resources are used are from America, and till now America hasnt started charging for email or free website even though they could have done so.
What a bunch of babbling nonsense. Wait for the government to ask and you'll wind up owing hefty penalties and perhaps a stay in prison.
Excuse me browntwn I said the "Company" not the individual the company does not have to report who they paid the money to, I said you should report it. Before you saying someone is wrong you need to review the post a little bit more carefully.
Either way, you are wrong. Both the company needs to report the income they paid you to the IRS and you need to report the income you received to the IRS. Neither limit is "10,000" as you said. Care to try again?