How much do I have to make before I must report it to the IRS?

Discussion in 'AdSense' started by Dharma Initiative, Jul 17, 2008.

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  1. #1
    I think I read something on Google saying if I make over $600 a year, they will send some tax form to me or something, but it wasn't really clear.

    How much money can I make from adsense before I have to report it or pay any taxes?
     
    Dharma Initiative, Jul 17, 2008 IP
  2. WhatsTheRent

    WhatsTheRent Peon

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    #2
    yes, $600 is correct
     
    WhatsTheRent, Jul 17, 2008 IP
  3. Dharma Initiative

    Dharma Initiative Banned

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    #3
    So, I have to report $600?

    How much tax do I pay for $600? I just reached $800...
     
    Dharma Initiative, Jul 17, 2008 IP
  4. WhatsTheRent

    WhatsTheRent Peon

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    #4
    well, thats a more complicated answer. You report all of it, so $800. Then you can subtract any "writeoffs" you had. The easy way to explain that is anything you sepnt to make that $800 is a writeoff. So adword fees, ebooks you bought this year, a computer you bought this year, mousepad, coffee mug for your desk, whatever.

    So then lets say you have $400 after those subtractions. You pay tax on just the $400, but the exact amount depends on what your tax bracket is. The more you make this year the higher percentage you'll pay. Let's ballpark it at 25%, so you'll pay about $100 to good ol' uncle sam.

    but it is a lot more complicated that that. It depends on other sources of income, if you are single or married, kids no kids....
     
    WhatsTheRent, Jul 17, 2008 IP
  5. shallowink

    shallowink Well-Known Member

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    #5
    Actually the $600 number is when they(or anybody else pays you that much unless you were a corporation, then they don't HAVE to file but can) file a 1099 with the IRS and send you a copy. The number you are supposed to pay taxes on starts at $400 or $450. That's gross before any deductions etc. Whatstherent has that part right.
    The complicated part is paying SE or self employment tax and paying Income Tax. Basically if you don't make over $6,000, you won't pay any income tax due to personal deductions, standard deductions etc. What you will have to pay is the SE tax. And that's a full 15% of net income. If you held a normal job, you would pay like 7.5% of this and your employer would pay the rest. Since you are self employed you get to pay both. It covers your social security benefits etc.
     
    shallowink, Jul 17, 2008 IP
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