If so, how much money do you have to make before you have to fill out a tax form?
Just to clarify some things, all of your Adsense revenue should be reported to the IRS. If you make over $600 in a given year, Adsense will send you a tax form telling you how much you made that year. They will also send this information to the IRS, telling them that someone with this name and social security number received this amount of money from them.
Adsense does not tax you directly, but they do keep track of how much you make and you are responsible for paying taxes on your income.
OK, so you won't be taxed until you make over $600, but you still have to enter you tax info?
YOU ARE TAXED.
Google isn't required to report to the IRS if you earn less than $600.00. You are still legally requited to report the income.
As mentioned above, you must pay tax on any and all income over your countries earning threshold--regardless of the source of income and the paperwork they do or do not provide to you.
the income is taxable. you receive a 1099 if you live in the US and maybe a VAT in the EU
Google doesn't tax you, you must provide your earnings to your government.
In Australia, you don't have to declare your Adsense, eBay or Amazon income if your Hubs or blogs are just a hobby.
There's no $ definition of what constitutes a hobby - but if you have a day job, you'll usually be OK to treat your online earnings as a hobby - and so long as your hobby is earning less than $20,000 a year, word is they rarely come after you.
In fact, the Tax Office seem more worried about people falsely claiming something is a business in order to claim tax deductions, than about the opportunity to collect more tax:
http://www.ato.gov.au/youth/content.asp … /66884.htm
I suspect that if your hubs made more than the threshold ($6000) it would be difficult to say it was being treated as a hobby? generally if you break the taxable threshold in any country, you tend to become taxable.
Not at all. Like I said, the Tax Office try to discourage people from declaring their online or craft enterprises as hobbies, not vice versa.
The thing is, if you run a business, you're allowed to claim business expenses. If I declared my websites and Hubs were a business, I'd be entitled to claim deductions for my PC, the mortgage on the room I use as an office, stationery, hosting and a whole range of other things. Unless you're earning more than $20k, chances are the deductions would be more than the tax payable - so the Tax Office would do a lot of work for no benefit.
Yeah, well, I still think that if you hobby made a million dollars, the government would want a cut. this law is intended for people who grow a few tomatoes or make cakes. I think fitting content writing into that category would not be a no-brainer. the minimum threshold is the point at which he government will generally make more oof you than you can make off them.
Of course! You mentioned the figure of $6,000, that's a long way from a million dollars. Anyway it would be hard to earn that kind of money without a structured business plan, premises, employees or outsourced services, stock, or all of the above, and that would definitely fall into the criteria for running a business.
Generally, in the US if it is income, it must be reported. I am not a tax consultant but I can read the IRS tax requirements and here are a few of the salient points.
Reported Income must be listed on your return, including wages, annuities, pensions, 1099 reports, etc.
Uncommon sources of taxable income are entered together on your tax return under the category of "miscellaneous income". Here is a list of possible earnings you may need to report in this section:
• Hobby income
• Gambling winnings
• Jury duty fees
• Trusts and estates execution fees
• Barter income
• Election judge's fees
If you answer yes to any of the following, you have to file a return:
Occasionally, individuals have one-time or infrequent financial transactions that may require them to file a Federal Income Tax return. Do any of the following examples apply to you?
* Did you have Federal taxes withheld from your pension and wages for this tax year and wish to get a refund back?
* Are you entitled to the Earned Income Tax Credit or did you receive Advance Earned Income Credit for this tax year?
* Were you self-employed with earnings of more than $400.00?
* Did you sell your home?
* Will you owe any special tax on a qualified retirement plan (including an individual retirement account (IRA) or medical savings account (MSA)? You may owe tax if you:
o Received an early distribution from a qualified plan
o Made excess contributions to your IRA or MSA
o Were born before July 1, 1938, and you did not take the minimum required distribution from your qualified retirement plan.
o Received a distribution in the excess of $160,000 from a qualified retirement plan.
* Will you owe social security and Medicare tax on tips you did not report to your employer?
* Will you owe uncollected social security and Medicare or Railroad retirement (RRTA) tax on tips you reported to your employer?
* Will you be subject to Alternative Minimum Tax (AMT)? (The tax law gives special treatment to some kinds of income and allows special deductions and credit for some kinds of expenses.)
* Will you owe recapture tax?
* Are you a church employee with income in wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security or Medicare taxes?
Technically, you will not be audited for an amount that is not reported by the entity that paid.
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