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Tax Withholding
Google withheld tax from my last payment
Treo650




msg:1357260
 5:03 pm on Mar 27, 2005 (gmt 0)

I have a U.S. corporation with an EIN number registered with Google AdSense. The most recently reported payment (not yet received) was reduced by an approximate 25% "Tax Withheld". Has anyone else experienced this? There was no indication or justification whether Google Adsense wittheld State, Federal or Local taxes. Is this now going to happen every month or was this a one-time withholding?

Surprised!

 

EVOrange




msg:1357290
 5:14 pm on Mar 28, 2005 (gmt 0)

What state is your biz registered in? One person said California, same as Google (I imagine), is it related there maybe?

My company is registered Texas and no taxes witheld.

EVO

hunderdown




msg:1357291
 5:23 pm on Mar 28, 2005 (gmt 0)

State of residence would only be relevant for state taxes.

I'm guessing that Google is doing this if their system shows documentation not submitted/not submitted properly. The person with two accounts probably needed to go through the documentation process twice, for both accounts.

Even if you report Google income on Schedule C, you still have to establish that you are not "subject to backup withholding" and I think this must be the problem here.

But I am not a tax lawyer. I'm just speculating. I bet we get an explanation soon.

incrediBILL




msg:1357292
 5:23 pm on Mar 28, 2005 (gmt 0)

Adsense members are employees not contractors

That has nothing to do with IRS requirements regarding payments.

Affiliate programs can withhold taxes as well.

Jenstar




msg:1357293
 5:25 pm on Mar 28, 2005 (gmt 0)

There isn't really anything in the terms that says they will be withholding taxes. The only thing it does say is:

You agree to pay all applicable taxes or charges imposed by any government entity in connection with Your participation in the Program.

Jenstar




msg:1357294
 5:27 pm on Mar 28, 2005 (gmt 0)

There is nothing regarding it on the AdSense Tax Info Page either:

https://www.google.com/adsense/taxinfo

level80




msg:1357295
 5:30 pm on Mar 28, 2005 (gmt 0)

There is more than that on this page - [google.com ] . Note: https pages don't auto link here on ww. Google wouldn't collect the info if they didn't need it.

[edited by: level80 at 5:32 pm (utc) on Mar. 28, 2005]

mayor




msg:1357296
 5:30 pm on Mar 28, 2005 (gmt 0)

I remember being confused with Google's online process for determining if federal taxes were to be witheld from payments.

I suppose if you entered inappropriate responses, that could result in taxes being witheld inappropriately.

[edited by: mayor at 5:31 pm (utc) on Mar. 28, 2005]

carguy84




msg:1357297
 5:31 pm on Mar 28, 2005 (gmt 0)

IRS May Tax Your eBay Sales
Do you have to report the money you make from hawking stuff on eBay? It appears to depend on whether you're running a business or just cleaning out the attic, but the IRS says all income can be taxed.

Seriously? So we presumably paid taxes when we bought the item, then have to pay taxes when we sell the item? So much for taxing double...

sonny




msg:1357298
 5:31 pm on Mar 28, 2005 (gmt 0)

I have 2 US based sole proprietor accounts whereby one was withheld the 28%. I established 2 accounts back before they had channels.
I filed that tax form the first day it came out, either 2004 or 2003 . If I remember correctly, Google wouldn't send checks until it was filled out.

West of Willamette




msg:1357299
 5:39 pm on Mar 28, 2005 (gmt 0)

For those who got taxes taken out...in your "Payment History", does your "Earnings" number match your "Payment" number? for last month's earnings?

ncreegan




msg:1357300
 6:11 pm on Mar 28, 2005 (gmt 0)

The plot thickens...

I just received my February check. Instead of being in the business check sized envelope, it is in one that is twice as tall.

Additionally, the layout is completely different, it's from a different bank, and there isn't a statement attatched.

I realize this may have more to do with the new payout system than the withholding... yet it may also be pertinent.

Treo650




msg:1357301
 6:14 pm on Mar 28, 2005 (gmt 0)

Check arrived today in the amount of 27.9% less than Earnings. Exactly the same as reported on the last 3 lines of Payment History report:

Feb 28, 2005 Earnings... $X,XXX.XX
Mar 23, 2005 Tax Withholding ($YYY.YY)
Mar 23, 2005 Payment... ($Z,ZZZ.ZZ)

[edited by: Treo650 at 6:16 pm (utc) on Mar. 28, 2005]

MrAnchovy




msg:1357302
 6:15 pm on Mar 28, 2005 (gmt 0)

Even if you report Google income on Schedule C, you still have to establish that you are not "subject to backup withholding" and I think this must be the problem here.

My thoughts as well. The amounts being stated are the exact amount the IRS has set as the backup withholding tax rate.

Possible reasons for backup withholding could be missing/incorrect tax forms, not making the required quarterly estimate payments (for those required to), or simply a goof somewhere.

Since 4th quarter payments are to be made by Jan 15th... and right around that same time, the IRS knows how much you made from Google. If you were supposed to pay & didn't or under-pay... right about now would be the first time the IRS had the chance to start forcing those payment through backup withholdings. Have no clue if this is why some of you have tax withholdings, but it's a decent possibility.

Adsense members are employees not contractors
That has nothing to do with IRS requirements regarding payments.
Affiliate programs can withhold taxes as well.

In the vast majority of cases.. they shouldn't

FWIW, straight from the IRS:
You do not withhold income tax or social security and Medicare taxes from, or pay social security and Medicare taxes or federal unemployment tax on amounts you pay to an independent contractor.

[edited by: MrAnchovy at 6:27 pm (utc) on Mar. 28, 2005]

Jenstar




msg:1357303
 6:17 pm on Mar 28, 2005 (gmt 0)

Any change there were any errors in the tax info #s you submitted to Google, if you are one of the ones missing 27.9% from your check?

ncreegan




msg:1357304
 6:21 pm on Mar 28, 2005 (gmt 0)

Any change there were any errors in the tax info #s you submitted to Google, if you are one of the ones missing 27.9% from your check?

I've been with AS for over a year and have never had problems with this in the past, I suppose it may be possible some data was corrupted.

I can't imagine being subject to backup withholdings without knowing about it.

note - just checked in the "Tax Information" tab -- I'm looking at blank form, is this standard, or is it supposed to have the information you previously submitted on it?

[edited by: ncreegan at 6:24 pm (utc) on Mar. 28, 2005]

sonny




msg:1357305
 6:22 pm on Mar 28, 2005 (gmt 0)

probably end up having to refill out w-9 tax form with that box,"Exempt from backup withholding" checked. I don't recall exactly what I put down that long ago.

sonny




msg:1357306
 6:25 pm on Mar 28, 2005 (gmt 0)

support unusually slow on responding. Don't contact them much, but when I did, they were to quick to reply

itisgene




msg:1357307
 6:35 pm on Mar 28, 2005 (gmt 0)

So, If I don't see "tax withholding" $#*$!.xx in my payment history, I wouldn't have tax withheld. Is it right? Anyone can confirm it?

incrediBILL




msg:1357308
 6:41 pm on Mar 28, 2005 (gmt 0)

FWIW, straight from the IRS:
You do not withhold income tax or social security and Medicare taxes from, or pay social security and Medicare taxes or federal unemployment tax on amounts you pay to an independent contractor.

I'm aware of that, but people may not be sending in quarterly tax payments and the IRS can (and may) say "Google, start withholding from AdSense over $1,000/month"

I've never had any program take out taxes YET, will see what this check has in store for me.

BTW, this could be the aftermath of the changes made to offer EFT, what we in the industry call a BUG.

ncreegan




msg:1357309
 6:52 pm on Mar 28, 2005 (gmt 0)

BTW, this could be the aftermath of the changes made to offer EFT, what we in the industry call a BUG.

I hope!

MovingOnUp




msg:1357310
 6:52 pm on Mar 28, 2005 (gmt 0)

Here are the IRS's rules for determining backup withholding:

[irs.gov...]

There are the instructions that Google should be following.

sonny




msg:1357311
 8:26 pm on Mar 28, 2005 (gmt 0)

received response:
According to the tax information submitted in your Google AdSense account
on Form W-9, your earnings are subject to tax withholding. As a result, we
are required by the IRS to withhold 28% of your Google AdSense income.
Although we were unable to automatically withhold federal taxes from your
Google AdSense payments in the past, this functionality was added as part
of recent enhancements to our payment system. If you have indicated that
you are subject to tax withholding, you will see a line item for tax
withholding on your Payment History page.

ncreegan




msg:1357312
 8:57 pm on Mar 28, 2005 (gmt 0)

If that's the case with all of us, some prior notification would have been nice.

Changed the info on the form... I'm wondering if my withheld will be released next month. Doubt it.

Less I'll be out April 2006 I suppose

jonknee




msg:1357313
 8:22 am on Mar 29, 2005 (gmt 0)

Got my check yesterday, no taxes were held. Personal account with SSN on file.

Jon_King




msg:1357314
 12:05 pm on Mar 29, 2005 (gmt 0)

>>"If you have indicated that
you are subject to tax withholding..." (on the form W9 submitted to G)

I think this G response answers the question. I can't remember it but there must have been a line on the W9 form indicating whether or not you wanted tax withheld.

neuron




msg:1357315
 6:25 am on Mar 30, 2005 (gmt 0)

on the W-9 form there is a checkbox for "Exempt from backup withholding"

near the bottom of the form there is another checkbox for "Check here if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return."

on page https://www.google.com/adsense/account-tax it states:
U.S. tax law requires that Google collect tax-related information from all AdSense publishers. Our records indicate that you have already submitted the appropriate information. You are solely responsible for providing and maintaining accurate tax information associated with your account. Should your tax information change, you may resubmit your tax forms at any time. Thank you for your cooperation.

so, you can change and resubmit your tax forms at any time. whether or not they'll send you money previously withheld if you change to "no withholding" is anybody's guess, but mine would be not.

incrediBILL




msg:1357316
 6:35 am on Mar 30, 2005 (gmt 0)

Check arrived, no taxes taken out.

So this is not across the board, yet.

carminejg3




msg:1357317
 2:37 pm on Mar 30, 2005 (gmt 0)

I contacted google... and this is a new feature... According to your tax standing (I'm running adsense as sole p) they added the feature of with-holding taxes for the irs. They told me this may be changed by you changing your filing status.

If you look at the pluses for google to hold your taxes, say they with-hold Billion dollars 1,000,000,000 over the course of a year if they leave that in a savings account for 4% that would equal 40,000,000 EXTRA for google just for holding the money.

I'm in the process of changing into an S corp and I would rather manage my own taxes...

**************************************************
***** response from Google support **********
**************************************************
According to the tax information submitted in your Google AdSense account
on Form W-9, your earnings are subject to tax withholding. As a result, we
are required by the IRS to withhold 28% of your Google AdSense income.
Although we were unable to automatically withhold federal taxes from your
Google AdSense payments in the past, this functionality was added as part
of recent enhancements to our payment system. If you have indicated that
you are subject to tax withholding, you will see a line item for tax
withholding on your Payment History page.

If you would like to update the tax information you have provided, you can
resubmit your information at any time.

To update your tax information:

1. Log in to your AdSense account at https://www.google.com/adsense
2. Click the 'My Account' tab
3. Click the 'Tax information' link
4. Follow the instructions on the 'Tax information' page to update your
current form, or to submit a new form.

Google will only use the latest tax information you provide for the
purpose of reporting to the IRS.

Please feel free to reply to this email if you have additional questions
or concerns.

The Contractor




msg:1357318
 3:26 pm on Mar 30, 2005 (gmt 0)

If you look at the pluses for google to hold your taxes, say they with-hold Billion dollars 1,000,000,000 over the course of a year if they leave that in a savings account for 4% that would equal 40,000,000 EXTRA for google just for holding the money.

Unless something changed since I had employees you have to deposit/send the employee tax money monthly (at least that's what I did). See [irs.gov...]

alika




msg:1357319
 3:44 pm on Mar 30, 2005 (gmt 0)

If you look at the pluses for google to hold your taxes, say they with-hold Billion dollars 1,000,000,000 over the course of a year if they leave that in a savings account for 4% that would equal 40,000,000 EXTRA for google just for holding the money.

Nice find, Contractor. There will always be questions of intent on this board, if not conspiracy theories.

We deposit withheld taxes as well. I wish the above was true though. But to do so would run afoul with Uncle Sam, and no one certainly wants that.

rvbuilder




msg:1357320
 4:04 pm on Apr 18, 2005 (gmt 0)

I just updated my account and taxes after reading this post. I set up an llc and pay myself a paycheck weekly from the business account which will allow ytou to onbly be required for a 15% tax on the revenue. If you take all the money then you are required to pay based on tax bracket.

Google will now initiate payments to you. You can expect to be paid in the payment cycle that follows the first month in which you accumulate more than $100 in earnings in accordance with the Google AdSense Online Program Agreement.

If you checked the "subject to backup withholding" box on the W-9 or indicated a non-zero withholding % on the W-8 BEN, Google is required to withhold up to 30% from payments made to you under the Google AdSense Online Program Agreement for U.S. income tax purposes. You may also need to pay additional taxes on these payments.

Otherwise, Google is not required to withhold taxes from payments made to you under the Google AdSense Online Program Agreement for U.S. income tax purposes. However, you may still need to pay taxes on these payments.

Please note that the tax information collection interface and any tax-related information provided by Google is not intended as and should not be construed as legal, tax, or investment advice. You should always consult your tax advisor to help answer specific questions regarding how tax laws apply to you and/or your business. The tax summary we have provided is necessarily incomplete, and the tax laws and regulations are subject to change. Therefore, Google does not guarantee and is not liable for the accuracy or completeness of any tax information provided, or any results or outcome as a result of the use of this information. For specific information regarding U.S. tax requirements, please visit the IRS website located at [irs.gov....]

Google uses industry-standard SSL (secure socket layer) technology to protect this and other personal information you provide us. In addition, Google stores taxpayer ID numbers in encrypted format for additional security. Please read the Google Privacy Policy for more information about what we do to protect your privacy.

Cheers,

James

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