Online Earnings and Taxes

1. 68

   emievilposted 16 years ago

   Hi All. Bear with me for this question (not even sure if I am in the right topic).
   
   As an accountant I can't help but ask - do you declare your online earnings (whether from Hubpages or in freelancing sites) and pay the related taxes to your government? Why or why not?

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      Maddie Ruudposted 16 years agoin reply to this

      Yes.  Because I exceed the minimum needed for reporting and am issued 1099-MISCs by AdSense, Amazon, and EBay every year.

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2. 72

   expectusposted 16 years ago

   I guess it would be wise to declare it on your tax form, if you are earning a decent amount that it would affect which tax bracket you fall into.
   
   and I'm not in the U.S but google adsense has some tax procedure you have to setup when you first make your account , I didn't really read it but that might be worth reading through

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      emievilposted 16 years agoin reply to this

      Hmmm, I didn't think I saw that tax procedure. I'd better check. Thanks.

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3. 88

   Marisa Wrightposted 16 years ago

   It depends entirely on your country of origin.  A lot of websites ask for tax information because they're based in the US, and US residents have to declare even small amounts of income.  If you're not a US resident, you sometimes have to hunt around to find out what to do - usually there's some kind of declaration you have to make, saying you're not resident.

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4. 77

   Uninvited Writerposted 16 years ago

   We have to earn a significant amount to pay taxes on earnings in Canada. I think it's over $3,000 a year and I haven't come close to that

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5. 70

   earnestshubposted 16 years ago

   In Australia you declare the income, but no tax till it is significant amount.

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   1. 88

      Marisa Wrightposted 16 years agoin reply to this

      That's not what I was told, Earnesthub.  If the income is derived from a hobby, you don't have to declare it.  In fact, the tax office would prefer you didn't - because if you do declare it, you're entitled to claim expenses as a tax deduction.
      
      Interesting how we've been given different advice in the same country!

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6. 68

   emievilposted 16 years ago

   Uninvited Writer and earnesthub, thanks. I guess it's different in your countries (lucky you). We're taxed here up to the smallest amount after what we call 'personal deductions' and these deductions are not really that significant.

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7. 61

   nicompposted 16 years ago

   Google will report your earnings to the IRS. They will also send you a 1099 at the end of the calendar year. Don't ignore it.
   
   I'm not a tax accountant, but having been self-employed for 20 years I suggest filing a Schedule C and taking advantage of the deductions that might be available to you. You don't necessarily need to incorporate or form any type of partnership; you can file as a Sole Proprietor using your Social Security number.
   
   Expect to pay federal, state, and local taxes on your earnings. If you make enough, be sure to look into quarterly payments. The IRS strongly prefers not to wait until April 15 of the following year to receive all their money. You will be socked with fines and penalties if you haven't been feeding the pig on a regular basis.
   
   Don't take my word for it. Consult a tax accountant or buy a copy of TurboTax.

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      Marisa Wrightposted 16 years agoin reply to this

      Nicomp, you should specify which country your advice refers to (it sounds like the US).  The person who asked the question was from the Phillipines.

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8. 48

   oderogposted 16 years ago

   If you are in country where online revenue are monitored, then it is wise to register

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9. 0

   pgrundyposted 16 years ago

   I declare all my writing income and pay taxes on it. I do it because, even though I'm not rolling in dough, I do exceed the minimum for filing purposes in the US and I want a paper trail showing I actually do earn money. All kinds of situations come up in which a person might need that.
   
   I'm trying to decide whether to take the home office deduction.
   
   I've heard it flags you for an IRS audit if you're low income.

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      nicompposted 16 years agoin reply to this

      I am also wary of the Home Office deduction. I suspect that you will lose out on the back end when you sell your house; they sock you with taxes on the proceeds of the sale based on the part of the house used for business. I may be totally off the wall.

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      1. 0

         pgrundyposted 16 years agoin reply to this

         No that makes sense. Even though we don't intend to sell, that's another issue that I hadn't even considered, and you're right. I should do pretty well with just my standard deductions, so I'll probably pass, especially now that you brought up the back end thing with the house...

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10. 68

    emievilposted 16 years ago

    Hey everyone! thanks for your replies. I'm planning to declare my earnings this year and I basically just want to see if other people are doing it. I don't think our IRS-equivalent body here is used to seeing "online earnings" as part of our tax return .
    
    Pam, good point. Here some of my clients who want to get a visa to travel to US have to show that they have income, otherwise, the US Embassy will not grant their visas. I guess having a losing business here is a red flag to the US Embassy people.

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    1. 64

       Maddie Ruudposted 16 years agoin reply to this

       It just falls under independent contract work, at least here in the States.

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11. 0

    Nelle Hoxieposted 16 years ago

    Yes, I pay ALL of the required taxes. Even though companies may not report affiliate earnings under $600 to the IRS, I report them on my Form C. And I take every allowable deduction.

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