was expecting a larger payment until 28% in taxes got eaten up by my adsense payment. i'm in the USA, individual vs corporate filing, but ouch!!! thought i'd get paid similar to a 1099 employee and pay taxes out of that vs getting taxed upfront... guess uncle sam got his part of my adsense income... anyone else get taxes this heavily or am i just overreacting?
i am planning to register my business as soon as i am ready to go online. what is the best way to handle the taxes? a poster in this thread stated that google witholds the taxes. if so, do i still need to report them at the end of the year as my income? or is the taxes already deducted and the money that my sites will earn, i get to keep it without paying the 30% at the end of the yr.
You have to report your earnings. If Google withheld taxes they'll send you a form indicating as such with the amount. You then report your total income and the amount withheld (if any) and then you wave your hands and do the magic formula and you find out if Google withheld too much or not enough. I don't think Google withholds anything. They have better things to do than figure out your taxes. If you make less than a certain amount the IRS may not care but don't count on it.
You should pay self-employment quarterly taxes. If you start making a lot, then look into an S-Corporation.