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US Tax % on Adsense

Discussion in 'AdSense' started by melfan, Feb 16, 2005.

  1. #1
    My buddy in US plans to open a new adsense account for our website venture. Since he want it to be under his name he will be paying US Taxes. I just want to have an overview on how much in percentage my buddy should pay per year? I heard from somebody that it is 11% for every $100. Is this true?

    Thanks in advance.
    SEMrush
     
    melfan, Feb 16, 2005 IP
    SEMrush
  2. clasione

    clasione Well-Known Member

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    #2
    I think it's more like 18 - 20.....

    But it depends on what type of tax bracket he'll be in.... I think... :confused:

    Is that the only thing he's going to claim? or is he adding it to a current business as additional revenue?
     
    clasione, Feb 16, 2005 IP
  3. melfan

    melfan Peon

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    #3
    Let just say its only for the adsense checks for the whole year.
     
    melfan, Feb 16, 2005 IP
  4. melfan

    melfan Peon

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    #4
    melfan, Feb 16, 2005 IP
  5. nevetS

    nevetS Evolving Dragon

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    #5
    I can't remember the form that google needs filled out, but with 1099 things, it's a 40% withholding, but an exemption is in place if the money is to pay a persons' wages.

    Sorry I can't be more help.
     
    nevetS, Feb 16, 2005 IP
  6. melfan

    melfan Peon

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    #6
    @nevertS thank you. 40% wow thats BIG. Is it 40% of your check? meaning 40% of 100 is 40$? Please clarify I newbie on US taxes.
     
    melfan, Feb 16, 2005 IP
  7. nevetS

    nevetS Evolving Dragon

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    #7
    well - that's for contracting work. I have no idea if that is the % for google adwords.

    But yes - that means that If I get paid 100 bucks for something, I get 60, uncle same gets 40, and hopefully I get a refund at the end of the year.

    You can claim exemption. I believe if you are not a us citizen, you are automatically exempt.

    When you go to fill out the form on Google, check the form number. Then go to www.irs.gov and search for that form number. There is usually the form available in pdf, and a form documentation pdf. The documentation pdf will spell out the percentages and the exemption rules.
     
    nevetS, Feb 16, 2005 IP
  8. melfan

    melfan Peon

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    #8
    @nevetS - thanks for the info!
     
    melfan, Feb 16, 2005 IP
  9. pg20706

    pg20706 Peon

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    #9
    Have your buddy ever paid taxes in US? Go to www.irs.org if you need more info.
     
    pg20706, Feb 16, 2005 IP
  10. lorien1973

    lorien1973 Notable Member

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    #10
    depends on your income level for that year. I run my adsense thru my corporation, so I try to make as little profit each year as I can, so my taxes stay as low as possible.

    If you require a 1099 (an individual) your tax rate will probably be higher, because you are taxed at a predictable level; also keep in mind that if you have a job that pays 30,000 and you make 20,000 from adsense that year, your total income is 50,000, which starts to move you into higher tax brackets. (thats simplified of course)
     
    lorien1973, Feb 16, 2005 IP
  11. jackburton

    jackburton Peon

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    #11
    I just did my tax. It came out to about 16% of earnings (somewhere in that vicinity). Of course, I didn't make all that much last year (mid-4 figures), so that might have accounted for the (relatively) low percentage.
     
    jackburton, Feb 16, 2005 IP
  12. wendydettmer

    wendydettmer Peon

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    #12
    Yeah, all depends on how much you make, and how you file the taxes. the IRS isn't as simple as giving out a simple percentage, that would just make life WAY too easy :)

    Good luck finding the info!
     
    wendydettmer, Feb 16, 2005 IP
  13. jackburton

    jackburton Peon

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    #13
    Maybe we'll all be in luck in a few years if Dubya manages to abolish income tax completely. First time I wish Dubya good luck on something. :p
     
    jackburton, Feb 16, 2005 IP
  14. Josh

    Josh Peon

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    #14
    Dude, hes not that dumb.

    Removing income tax compltely would compltely increase the national debt, yada yada yada.. I dont think I have to go into what that would do in the long run ;)



    Josh
     
    Josh, Feb 16, 2005 IP
  15. wendydettmer

    wendydettmer Peon

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    #15
    there are states that don't have it, but i can't see us getting rid of it on a federal level :)

    i chose social work as a career - i ain't ever gonna get out of the lower bracket anyway lol
     
    wendydettmer, Feb 16, 2005 IP
  16. melfan

    melfan Peon

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    #16
    thanks for the info guys. US tax is reallly high. I am just shock on the rates you specified coz here on our country (and other asian countries I guess). We pay only what we declare.
     
    melfan, Feb 17, 2005 IP
  17. schlottke

    schlottke Peon

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    #17
    If you are in the US running a business without a partner, the best bet is to set yourself up as a sole proprietorship. Then you have a much larger list of deductions than filing as an individual (you can write off your car, mileage, rent, dining out, etc.) as long as it is business related.

    If you file all of your taxes at the end of the year, put as much money as you can into non-taxable retirement plans (TSP, etc.) That money is taken off the top of your wages and doesn't even count towards your taxable salary.

    You *should never* have to pay out more than 20-30% of your salary, regardless of tax class, though.
     
    schlottke, Feb 17, 2005 IP
  18. wendydettmer

    wendydettmer Peon

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    #18

    Well, we pay what we declare too, but google (and other companies, etc) send documents to the government so they know what has been earned. so we have to declare the same thing :)
     
    wendydettmer, Feb 17, 2005 IP
  19. jackburton

    jackburton Peon

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    #19
    That's open to debate. We don't have state tax in Texas, and the sales tax is at 8.25. That works just fine for us. On the federal level, maybe hike the sales tax and luxury tax, and abolish the income. It's doable. A lot of very smart people says it's doable.
     
    jackburton, Feb 17, 2005 IP
  20. lorien1973

    lorien1973 Notable Member

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    #20
    If you taxed consumption; you could have a national tax rate of about 6-7% and have more money in govt coffers than could ever be wasted away. Of course, it'd involve taxing services such as lawyers, donations, etc (everytime money changed hands) but it'd make it a lot easier on everyone.
     
    lorien1973, Feb 17, 2005 IP