Hey there. Let's take this example: - I'm doing CPA (or aff marketing or whatever) and the company pays me via paypal. - I already filled the w-8 form for the company's site (as i'm not from the usa) I know that if i withdraw my money from paypal to my CC (verified account), i must pay taxes if i earn something above a limit (which i don't really know what it is). But what if i do not withdraw the money and i use them for buying things on the Net (ebay or any other e-commerce site)? Do i need to pay taxes on them? I guess NO because paypal it's an electronic money. But this is just IMHO. Clear me up guys Cheers, Stefano
I'm not sure where you're from, but in the US yes, you still must declare it as income. Whether you withdraw it or not, or use it to buy other things, it still must be declared. I read the other day the IRS said police officer have to pay taxes for any discount to rent or free rent they receive for working security for their apartment complexes off duty. Electronic funds are still funds.
It is still earned income whether you withdraw it or not ...and in most countries internet income is still income that must be declared. Check the tax laws in your country.
You do not pay taxes on just withdrawing money from Paypal. You are taxed on income earned. This normally means that if you earn more than $600 a year, the company who paid you will send you a tax form of how much you earned. It has to do with the direct company not with Paypal. Paypal does not keep track of earnings or withdrawals for tax purposes.
oh thanks. Will the company compulsorily send it? I mean, i do not have to worry about "oversights" right? Btw, i'm from Italy. Where should i look for this info? I'm 17 you know, so clueless about these things Cheers
thry this http://193.206.103.214/didattica/documenti/doc%20giuri/sistema%20fiscale.pdf its a summary of italian tax laws, with links to more resources.
Also, you more than likely will have to worry about "overlooking" things. The American Internal Revenue Service doe Audits on people, which basically means they go over everything (any income/expenses) for the past 4-6 years. If its an innocent overlooking, they may just fine you a little bit, but it it was on purpose, here, there could be stiffer penalties.
Although you won't get away with it I read technically income tax is illegal, ie the law that enforces it has never actually been in place and if you try to find it, you'll be led in circles because it doesn't exist. Even accountants etc have gone on record saying this and are no longer filing returns.
What if he spends the money from paypal on his own business, making the revenues and expenses exactly the same?
You can either pay taxes now, get a good business structure and a good tax plan in place or you can wait years the down the road and pay the same taxes + the penalties and maybe jail time depending on your country of choice. Do yourself a favor and research which type of business you want to open, talk to an tax attorney and account and go from there.
Revenues can equal expenses but you still have to show both revenue and expenses separately on your income tax form. Tax will be based on the difference.