Not incorporated and make money with Google Ads? The IRS will fuck your shit up...

jmizzle

jmizzle

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Aug 15, 2007
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A lot of people on here ask "when should I incorporate?" Well, whether you're making bank off Google or are in the red, the IRS considers you as a private contractor of Google, operating as a business and will fuck your shit up if you don't pay self-employment taxes on that money.

Some hobby website called "Online Etymology Dictionary" (Online Etymology Dictionary) had some ads on it to help pay for server costs. The guy claimed the revenue as "extra income" but didn't pay self employment taxes on it. The tax man came a-knocking and fucked him up for backed taxes plus penalties and interest. The guy had a long explanation of the events leading up to it, but has since edited the page with an update.

However, this blog (Taxman: The Blog: Cancel Christmas? Dissecting a Tax Drama?) picked up the case and explains the situation, why the IRS fucked him in the ass without the courtesy of a reach around and how you can protect yourself.

No, it's not my blog. I don't know the guy hosting the blog and fuck you if you don't believe.
 


OP is a retard.. anytime you make money off anything you gotta claim that shit, regardless of incorp status excluding charities.
 
Obviously you have to pay fucking taxes and this guy thought he was. The issue is with paying enough taxes and keeping track of your expenses related to your IM shit. For people just starting, they probably don't get an accountant right away thinking that they don't need to since they haven't started making money yet or are making shit money. With that, they may think that filing the income from google under "Other Income" has them covered, they'll pay their taxes on it and be done.

This isn't for people that have been doing the AM thing for a while. This is for those people like "I quit my job, shit just got real" and the "I'm trying to make a few bucks after work while I learn AM" crowd. It's just one more lesson to hopefully push people to get a fucking accountant and also establish an LLC or Corp as a shield than to take the chances of getting fucked over.
 
jmizzle said:
Obviously you have to pay fucking taxes and this guy thought he was. The issue is with paying enough taxes and keeping track of your expenses related to your IM shit. For people just starting, they probably don't get an accountant right away thinking that they don't need to since they haven't started making money yet or are making shit money. With that, they may think that filing the income from google under "Other Income" has them covered, they'll pay their taxes on it and be done.
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BluAffiliate said:
Get accountant and none of this shit would have happened.
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Again, what he said above.
 
this is only applicable once receiving a check correct, not just having the money in your account saying "google owes you X"?
 
Right, if you are doing cash based accounting. If you receive the income before Dec 31, then its taxable for that year. If you get paid Jan 15 for the month of December, then it goes on the next year taxes.
 
Yeah, seriously who the FUCK doesn't know that you have to pay self employment tax? You must be one dense sack of retardedness if you think you don't have to pay social security and medicare just because you're not getting a w2 and it's not being withheld.

Your options are:

1) Get an accountant

or

2) Get a fucking clue, it's not hard to do your own taxes if you're not an idiot

PS Turbotax does this shit for you, you gotta be dumb as fuck to mess that up

And another thing for those who have apparently never been to irs.gov even though you spend all fucking day on the internet. If you're self employed you're supposed to be paying estimated quarterly taxes.
 
Um, you don't have to be a corporation to pay self employment taxes. You don't even have to be under any legal structure, even something as simple as an LLC. You just need to report and pay the self employment taxes. You just have to pay. Fucking idiots out there.
 
lschmidt said:
And another thing for those who have apparently never been to irs.gov even though you spend all fucking day on the internet. If you're self employed you're supposed to be paying estimated quarterly taxes.
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Indeed, and if you don't, you get penalized (It's not very much, but if you're making a lot of money it can be quite a bit, obviously).

I have a hard time remembering and fuck up / skip quarters. What I want to know is if I didn't send in 2nd or 3rd quarter, can I still send them in late without being penalized for it? Assuming I send them in before December for example?

(Yes, I know, a question for my tax person, but they're not in now)

edit: n/m, google helped me: http://www.ehow.com/about_6382062_penalty-federal-estimated-taxes-late_.html

Damnit.
 
Er this got me worried...and perhaps I am dumb so...

I am making some money of AM, right now its less than $1000, but I have spent more than $1000.

All this time my plan was to make a company AFTER I start making some profit.

Is this totally dumb? Should I make a company ASAP?
 
you need to pay taxes on your net profit... if your net profit is negative... you wont owe anything.. its a loss... you do not need a company... you need to not spend all your money when u get paid though... just b/c ur check says 1k doesnt mean you really made 1k... you need to factor in taxes
 
dreamache said:
Indeed, and if you don't, you get penalized (It's not very much, but if you're making a lot of money it can be quite a bit, obviously).

I have a hard time remembering and fuck up / skip quarters. What I want to know is if I didn't send in 2nd or 3rd quarter, can I still send them in late without being penalized for it? Assuming I send them in before December for example?

(Yes, I know, a question for my tax person, but they're not in now)

edit: n/m, google helped me: What Is the Penalty for Paying Federal Estimated Taxes Late? | eHow.com

Damnit.
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Thanks for that link. I had to skip my $5000 payment to the Fed's in the second quarter because of some unforeseen expenses I had to cover. A $24k roof being one of those things. I may make a call and see if they can tell me exactly what I owe so I can square it up before Dec. 31st.
 
welcome to business 101- people who somehow think that 'just a little online moniez' is okay are the same people who would get hit for back taxes in any other business they "ran"
 
wiredniko said:
Er this got me worried...and perhaps I am dumb so...

I am making some money of AM, right now its less than $1000, but I have spent more than $1000.

All this time my plan was to make a company AFTER I start making some profit.

Is this totally dumb? Should I make a company ASAP?
Click to expand...

You need to keep track of all your income and expenses and file a schedule B when you do your taxes so you can subtract the loses from any other income you have.

You are allowed to have a lose but you need to make sure that you are running things like a business and not a hobby. The best thing to do is have a separate bank account and a good set of books in case of an audit. You also should have some plan on how and when you plan on making that profit. If you do not then the irs could decide that your business is really a hobby and not allow your deductions.

And do not claim a home office exemption unless you want to get audited and an account and/or a tax attorney has told you that you qualify. The irs is very strict on home office exemptions and disallow them most of the time so anyone who tries to claim it are just asking for an audit.
 
Back-to-the-Future-s-Doc-Brown-Is-A-Big-Fat-Liar_mantel.jpg

NO WAI
 
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