Does anyone pay taxes on their earnings from their websites?

this is the worst advice, ever.

You must pay taxes on all earnings, it is the law. But good news is, if you are an LLC or Corporation you can also write off all your losses and expenses. So if you are losing money, advertising, buying new servers, paying for bandwidth, it can all be written off to offset your loss in profits from taxes.

There are so many things you can do to also protect that income, business expenses, you can pay for vacations if you do it right.

Don't cheat the taxes, as much as you want to. It will come back to bite you in the ass if anything does go wrong.

 

I learned this in school, in my economic class, a few years ago. I also read it in another forum. That in california if you ever receive less than $10,000 in one year as gift, reward, or by selling product or service you don't need to report it.

I will check this info again.

 

I pay new york state taxes on all earnings from websites. You have to get your state and federal tax id # and constantly get mail from them, fill it out, and send it back (usually with a check). But you can write off all business expenses such as advertising and upkeep costs, wages and so on, so it does work out.

It feels like giving checks away, but I guess 0.01% of all of that money is for our great nation, by the time it trickles down the political line.

 

Well yes, gifts can be untaxed, but your commercial earning are not gifts. No one at the tax office would believe that.

You must pay income taxes on all earnings.

 

Definitely!

I have a business permit, Texas sales tax certificate, and a business checking account.

I have a home office, so I can write off a portion of household expenses (mortgage interest, utilities, etc).

I report my income & expenses on Schedule C as it is self-employed income. May decide to register as an LLC later this year to cover myself for any liabilities and reduce my self employment taxes.

Talk to your tax professional - I happen to be an accountant so I can tell you that a good CPA will know how to maximize your deductions. A good one will also probably tell you to register your dotcom biz as an LLC if you have a decent amount of earnings.

 

It's not your earnings that you need to pay taxes on, it's your Net Profit. There's a big difference. If you spend $500 on advertising and make $2000 in commissions, you only need to pay tax on the $1500, not the full $2000.

Up in Canada where I am you face jail time for commiting income tax fraud, but worse you get your credit rating damaged. Not being able to get any kind of loan or credit card or mortgage will really bite you in the rear lol.

I pay all my taxes, but I pay them annually. So I set aside about 40% of my profits into an investment account with the bank. They put the money in mutual funds, bonds, GIC's, tbills, etc. Basically any kind of secure investment. At the end of the year all the funds are cashed out to pay my taxes.

Doing it that way ensures you have the money available at the end of the year to pay taxes. If it's just sitting in a bank account you get tempted to spend it. So lock some of your profits into short term investments with the bank

 

Please don't confuse the rest of the world on this board with this number that is only based on the American tax system.

 

That number isn't based on the American tax system anyway. I can't speak for state taxes, but no matter what state you live in, in the US you're required to report pretty much every cent you make. You don't owe taxes on income under $400 as an independent professional I believe (might be $600). For example...

I worked for a website last year doing writing work. If I would have earned less than that for the year, I wouldn't have to pay tax on that income. The client also wouldn't have to report paying me that income. But I would still be required to report that I earned it. No way around that. But because I earned more than that, not only did I have to pay federal taxes on it, but the client also had to report how much they paid me to the IRS. So if I didn't report it, the IRS would know about it, because they'd have received the mandatory paperwork from the client. If you earn that much from Adsense or something, they'll report it as well.

You can read more about it from the IRS here: http://www.irs.gov/faqs/faq-kw105.html

Jenn

 

I earn from affiliate programs and for everything that I earn I pay a percentage of that for taxes.

 

You should report everything. If you put your earnings in a bank a/c it is submitted for tasx purposes automatically unless you state you will declare it manually.

Anyway, if you declare what you earn, and it is less than a certain amount, you should be exempt from taxes.

 

The general consensus...if you live in the U.S. and your income for your site(s) is more than $10K per year...then file taxes. If not...don't worry about it.

 

There is a minimum you have to make over but 10K is not it if i remember it is much lower maybe 3K


To be safe you are better off filing no matter what you make as for low earners you most likely wont owe anything.

 

I don't pay taxes yet, I don't make enough on my sites

 

What sites do some of you guys own where you have to pay taxes?

 

It doesn't matter what site you own. As longs as you are making over a certain amount of money from it then you will have to pay taxes. In the UK it is something like £4,000 before you have to start paying taxes on any profit over the £4,000 mark.

 

Yes I pay taxes, and it hurts every time the checks need to be written out

 

Yes it does hurt, but I prefer to run my own business and pay taxes rather than working for someone else for a basic wage.

 

So many people are saying this. It is completely untrue. Let's put it to rest. If you make $400 or more you need to pay taxes in the US. From the IRS website:

Owen

 

Thanks for confirming it's $400. That's what I thought. I think the $600 figure in my head before was for the clients, and the limit for when they need to send a form 1040 or whatever it is.

Just remember though, even if you earn less than that (and that's how much you earn total as an independent professional, so earning less than that for a ton of clients doesn't mean you don't pay taxes on any of it), you're still required to "report" the income to the IRS. Everything has to be reported, whether you owe on it or not.

Jenn