Hello everyone! I'm new to the form and I've done some searching and found a variety of answers but nothing quite clear. I just switched over from Yahoo (YPN) to Google AdSense because YPN is closing at the end of the month. I have to say that Google is doing extremely well for me. Brining in $70-$100 per day. However, can AdSense take money out of each paycheck at the end of the month so come tax season (January 2011 - April 15, 2011) I don't have to worry about paying in? I know Yahoo did this for me and I absolutely loved it because I have no idea how much to hold back. And even if I do, I would rather it be taken out each paycheck vs. paying in a ton of money come tax season. Thanks!
Any help with this? Does anyone else have taxes taken out each month before they are paid by Google? If so, how are you doing this?
So everyone just pays a ton of money to the government come tax season on the money they made from Google AdSense the previous year? Geeze... you would think for Google they could set something up. YPN did and I loved it. Well I guess I'm just going to have to setup a seperate bank account and set aside money each month to pay for taxes.
You dont pay for the previous year, you pay for the current year (at least I do) I use pay1040.com to make 4 estimated payments each year And then there's state tax. How much tax will you pay to the IRS on a 1040-ES? 15.3% self employment tax + 10% federal tax for the first ~8,000 and 15% federal tax for ~8,000-~32,000
I don't know what country you're from... but here in the U.S. we pay for the previous year. So taxes for us were due by April 15, 2010 and those taxes were for the year 2009. So April 15, 2011 will be for the year 2010
Of course google wouldn't send a 1040. Aren't you supposed to file a 1040-ES for estimated tax payments if your taxes are not withheld? How come it's so hard to find information on wtf to do for taxes?
"You do not have to make estimated tax payments until you have income on which you will owe income tax. If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. You can pay all your estimated tax at that time, or you can pay it in installments. If you choose to pay in installments, make your first payment by the due date for the first payment period. Make your remaining installment payments by the due dates for the later periods. " This says nothing about paying for the previous year. It's current? http://www.irs.gov/publications/p505/ch02.html#en_US_publink10007348 So pretty much, if I make any 'self employment' or income that doesn't have tax withheld during the january 1 - march 31 period, I have to pay the estimated tax for that income by april 15th. Is that not right?
You are not an employee of google, so they would never withhold tax. You are an independent contractor, so to speak. You are 1099'd, but only in the the US. As far as making estimated tax payments, you can do that every quarter if you wish. Or, just wait until you file the next year and settle up. it is true that if you get a ton of money from adsense, you may pay a penalty if none is withheld or you made no payments. But this is more for people who make a ton of money. This would never affect me, because my offline job pays much more percentage wise to my overall income. This means the penalty is only there if you owe a lot of tax. I normally end up getting a refund, so there is no need for me to make estimated payments on adsense income. Talk to a tax expert to find out how much you need to make before you worry. Stephen C
I'm correct to believe that there is nothing wrong with paying 4 estimated payments in 2010 for 2010 earnings, as I earn them, though, right? Cause I already made April 15'ths payment... My online work is the only source of income I have and it's all self employed
Well, it sure beats the heck out of paying a penalty or owing a lot at the end of the year, that's for sure. Stephen C
You make quarterly estimates according to 100% of the taxes you paid LAST year, OR you can pay 90% of what you expect to earn this year - however, the first option is safer, because if you choose to pay 90% of what you expect to earn this year, and you underpay, you will be looking at an underpayment penalty. If you pay 100% of what you paid LAST year, it doesn't matter if you make more this year, you will just pay the difference when you file your return.
Nope. There is also different rules for those making over $150K adjusted gross, then it's 110% of last year.