US Tax % on Adsense

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.

 

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

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

Is that the only thing he's going to claim? or is he adding it to a current business as additional revenue?

 

Let just say its only for the adsense checks for the whole year.

 

any US publishers?

 

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.

 

@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.

 

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 - thanks for the info!

 

Have your buddy ever paid taxes in US? Go to www.irs.org if you need more info.

 

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)

 

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.

 

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!

 

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.

 

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

 

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

 

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.

 

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.

 

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

 

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.

 

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.