Aces High Bulletin Board
General Forums => The O' Club => Topic started by: Penguin on January 02, 2012, 07:59:27 PM
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Don't worry, Skuzzy, this isn't political (at least I hope no trolls show up).
I've recently started to put ads on my YouTube videos, and I've earned about 0.46 USD just today. However, I'm unsure of how to report this on my or parents' taxes. I know, I know, it's like finding change on the sidewalk, but this could get bigger as time goes on, and I don't want to be an accidental tax evader. So, when and how do I start reporting my earnings and sending a few of the pennies I've earned off? I plan to send the money off to charity (MSF) as soon as the sending efficiency (the amount of money divided by the cost of sending it) reaches 95% if by mail or each time it gets to me if electronically. I sound ignorant because I am ignorant, and your help would be appreciated. :)
-Penguin
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+1 for being responsible
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Thank-you! But I still need help figuring this stuff out. The tax code is a finely-tuned machine with some heavy and fast moving componenets that my rear-end would not like being attached to.
-Penguin
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You don't have to report it until you reach a certain threshold. I can't recall what it is at the moment, maybe $750. Somebody will probably know, and chime in soon.
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Phew! I don't think it'll ever get to that point.
-Penguin
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Google came to me a few months ago, i'm up to 90 bucks :D
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Uh-oh, perhaps taking care of this is more EDIT: imminent than I expected.
-Penguin
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Dont bend to the man! Viva ad free youtube videos!
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Looked up for you... A dependant does not have to report income until it is $950 or more in a year.
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@Tupac Oh no, I'm pure evil, you see. I love to watch people's irritated reactions to ads, I get such a kick knowing that I'm making them suffer. And when the pressure comes, I move with the herd of my fellow bubble-wrapped sheeple for safety and buckle like a lawn chair. 'Cuz, that's the way, uh-huh-uh-huh, I like it! :P
Thanks PFactor, I'll remember that.
-Penguin
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Cant you claim non-profit? Then you dont have to pay the taxes do you?
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Like PFactor said, it'll be a long time before I even need to think about stuff like that.
-Penguin
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I dont think Ill allow ads on my vids just because I know how annoying they are....ever.
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I'm pure evil
Impossible.
That'd be me. It's in my sig
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It's far more complicated than "making a certain amount" Are you a business for example?
Props for looking into doing it legit though :salute
I would suggest not worrying about it at all until you make something that breaches the triple digits, if it's in a month, you need to look into this, if it's in a year you need to look into this, if you are employed legally to some degree.
You may PM me if you want exact numbers, but it may(probably) matter on your state as well.
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The point about being a business is valid. If you generated the income without an employer arranging to pay taxes, you are basically self employed and will need to pay self employment taxes. Basically it's the portion of social security tax your employer normally pays for you.
The good part is that you can write off the cost of your computer over time and also subtract your expenses directly from your income, which will likely drop your income to near zero at this point. Drank a coke while uploading the video? That could be an operating expense if you document it properly.
The biggest negative for self employment in our current tax system is that unless you file a really long form proving that your income is variable over the year, the government expects you to possess magical powers and have extra cash laying around, so you can predict your income for the whole year and pay taxes IN ADVANCE throughout the year. For example, if you make zero money January through June, but get a self employed job from July through October, the IRS expects you to have known this in advance and will fine you if you didn't pay 1/4 of your expected taxes way back in March, before you even had the job or even before you had any money to send in at all. If you don't, even if you send in plenty of money later after you have the income, they will fine you and charge you interest on the money you didn't send in for the March deadline and probably June too. This has been the biggest pain in my A$& for the last 7 years, since my wive has had a variety of self-employed contract jobs every year so her income is extremely unpredictable. I've solved it by simply massively overpaying my own taxes throughout the year, but that's really inefficient.
If you make enough money to feel like you need to file taxes, you might want to admit defeat and join the millions of other oppressed subjects of the realm, and hire a tax accountant to do your taxes. This ought to be trivial for any tax accountant and should take them less than an hour, so it won't cost more than a couple of hundred bucks (which can be subtracted from next year's income as a business expense). I really don't know if the 1040EZ allows for self employment income or if it does, what the upper threshold is that would require you to file the long forms. The problem is that the worksheets deducting expenses are some of the long forms...
Or you can try tracking your business income/expenses with something like quickbooks, and use turbotax which will step you through filing self-employed taxes. Turbotax will cost you about $60 if I recall correctly, which is anywhere from half to 1/10th what an accountant would probably charge you. The downside is that turbotax might not get you the same results as a tax accountant especially if you might owe fines for things like not having a magical prescient unicorn and big pot of gold to pre-pay taxes throughout the year. You get one free year exemption from that fine and possible exemptions from that fine if your income varies greatly from the previous year, but turbotax isn't always so good at identifying when you might NOT have to pay the fine.
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Yikes, that's complicated. I don't even make enough money to pay for turbotax, much less an accountant. At this rate, assuming my computer cost 60,000 cents, it would take me over 3 1/2 years just to pay for that. Now, I am a dependent, so until my revenue stream reaches over $925/year I'm quite sure that I won't have to report the income. Then comes all the water I drink while I make the videos, combined with the fact that I'll send the money to Toys for Tots, makes my income negative. However, I'll copy your post down in case my channel gets bigger (and trust me, it would have to get a LOT bigger before it got anywhere near even $100/year).
Thanks for the help, eagl, you are one knowledgeable dude.
-Penguin
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can I have a link to your channel? might need to check it out :D
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I feel like a shameless plug doing this, but if you insist...
http://www.youtube.com/user/Pealanor?feature=mhee (http://www.youtube.com/user/Pealanor?feature=mhee)
-Penguin
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thanks,always been kinda interested in Minecraft, DCS A-10c just takes too much time
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If you make any amount above $600 in untaxed income in a calendar year you have to report it by filing a 1099 form. You're liable because it falls under "services" in the tax code. You probably won't end up paying tax on it because you're not anywhere near that limit, but it's best to report it. After that point all that eagl is saying comes into play, aside from the fact that the 1040ez form doesn't allow for this. You should still report the income on a 1099 for good measure.
I have to file a 1099 at the end of the year due to my current occupation. It's not that big of a deal.
EDIT: You'll probably have to request one be sent to you if you're under $600.
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What ever you do, do NOT ask an accountant. Especially not the one your parents maybe using to file their taxes in a few weeks :noid
This is not a look at me thread :lol