Paying taxes on your advertising revenue?

[WabbyTwax]

What are you thoughts on paying taxes on your advertising revenue? I'll be honest.. I havent paid any taxes on any of the money I've earned online. Should be seriously worried about the IRS finding out? Do all of you make paying taxes on the money you've earned a huge priority? Do we even HAVE to pay taxes on the mone we earn from online advertising? What can happen if we don't? Some of the money I get comes from companies out of the country like Canada, do I have to pay taxes on this money?

Hope these arent too many questions but I really have been wanting to know what the whole situation with this stuff is. I'd love to hear how everyone else is approaching this.

[dnaxx]

i also do not pay taxes for the revenue, but I think it's ok as long you do not earn more than 200$ a month...

but there were also times when I earned about 500$/Month and I did not pay any taxes.

[Jan]

Where do you two guys live???? (country)

Okay wabby I see you are in USA......the IRA would be aware of your earnings, so I suggest you declare them!

[Kaliber]

Wabby lives in the US (see his profile) but im not sure about dnaxx

[WabbyTwax]

The IRA? haha what will they come blow up my car if I don't pay? heh sorry for the humor.

If the IRS is aware of my earnings why arent they asking for any taxes? How long does it take for them to say something about it? Would they make me pay all of the taxes I owed at once or would I just be able to make payments? Even If I were to pay the taxes on it.. how do I do it? I just send a check to the IRS and say HERE! ?

I probably won't bother with it unless they ask me for it.

[Jan]

Sorry about the IRA :o

Not being American, I might let the ad companies that frequent this forum answer how they deal with affiliates taxes.

Actually there is a link I can add, just let me find it.....

....found it

http://www.freewebspace.net/forums/showthread.php?s=&threadid=13441

[Woofcat]

the irs is not going to look at you unless you making lots of money... if you're worried about it just give the ad co's fake name/ss# :)

[Jan]

Originally posted by Woofcat
if you're worried about it just give the ad co's fake name/ss# :)
Then you risk losing all the well earned money when they find out! :devious2:

[WabbyTwax]

Not paying taxes due under your social security number is one thing because you can just pay it back.

Giving fraudulent information to evade paying them altogether can get you a good bit a jail time not to mention the hefty fines.

And YES they do punish people to the full extent of the law for tax evasion!

[FineClicks]

Originally posted by WabbyTwax
If the IRS is aware of my earnings why arent they asking for any taxes? How long does it take for them to say something about it? Would they make me pay all of the taxes I owed at once or would I just be able to make payments? Even If I were to pay the taxes on it.. how do I do it? I just send a check to the IRS and say HERE! ?


Exactly what a friend of mine said 5 years ago...guess who came knocking on his door just a few months ago? You guessed it, the IRS and they had a nice little audit for him that made him pay 5 years of taxes PLUS alot of interest with that on top of it. I will probably take him about 5 years to pay them off.

The IRS is not to play games with. If you owe them enough they can and WILL take your home, car, and any other valuable assets that you may have...how do you think they get those government siezure home and car auctions? The IRS has no mercy...remember that.

If you are not sure what to do simply go to your local H&R Block or any other reliable tax consultant...it will be worth it in the long run.

[WabbyTwax]

So am I to understand then that there is no law saying revenue earned from the internet is not taxed? Or is there any kind of loopholes that any of you may know about when it comes to taxing online revenue?

[FineClicks]

It would be best to be safe than sorry and report all of your earnings whever it comes from...Now don't forget that when you claim your income from the internet you can also deduct your internet expenses too such as your hosting fees, marketing costs, internet connection fees, etc... so that way it will reduce the taxes that you would have to pay if any.

[WabbyTwax]

Thanks for the help FineClicks! =)

[xpbargains]

what about ebay then? i sold my used computer and i will be taxed?

[Lawrence]

xpbargains,

If your computer was for your business, you will need to report it.

Whether or not you'll be taxed depends on when the computer was bought and the price which you sold it for.

The IRS will look at the price of the computer when you bought it, deduct depreciation for the time that you used it, and then compare it to your selling price to determine whether or not a profit / capital gain was made on the computer.

According to the IRS, I believe depreciation for computer equipment is 1/3 the original price per year.

[conkermaniac]

I live in China (at least now I do). Would I still be hunted down by the IRS anyway for not paying taxes on my ad revenue?

Of course, that's considering that I even FIND a program that will support someone living in Asia. :rolleyes:

[Jan]

No, you would need to abide by Chinese Tax laws :)

[conkermaniac]

Even if I'm an American citizen, right?

[Lawrence]

conkermaniac,

I would highly recommend seeking help from a tax professional for your scenario.

There are very specific laws on the treatment of American citizens doing work outside the US borders.

I know that if you're running a business that is registered in the United States, you will have to abide by US tax laws.

[TJGuitar85]

That makes no sense...You dont have to pay tax when you get money from selling stuff on Half.Com? A while go people said they only tax you if you get more than 300$ a month, well how come companies dont just ask for the SS# when you get closer to that range?

TJ

[Dusty]

A while go people said they only tax you if you get more than 300$ a monthA sole-propietor business (like your website) with a net income of $400 or more must file a federal income tax return. If it's under that, don't worry about it. If you run more than one business then the combined income must be under $400 or you'll have to file a return. A partnership, corporation, or LLC must file a return regardless of the net income.
well how come companies dont just ask for the SS# when you get closer to that range?The advertiser needs your SS# in case they're audited. They need proof that the money they're paying you is actually going to you.

[Dusty]

What will happen if you don't pay taxes:

If the money you make is taxable and you neglect to declare it, 98% chance is that nothing will happen and you'll get away with it for years. The IRS doesn't know and won't find out unless someone tells them. Usually the snitch is a 1099 form, but a business based solely on ad sales isn't likely to have any dealings with those.

However, if you are by some means or another caught, what would happen depends on how your react. You'll probably receive a letter of inquiry and most likely a bill to go along with it. If you willingly pay the back taxes, you're fine, and the IRS will almost always grant amnesty, meaning you don't have to pay any additional penalties. If you don't willing pay the bill and you continue to evade taxes, then there'll be criminal charges filed against you and you face heavy fines and jail time.

Falsifying information, like giving a fake SS# number, and collecting money on it is highly illegal and it won't be as easy as just paying back what you owe if you're caught. I strongly suggest you don't do that.