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Adsense tax
hieuvnguyenaz




msg:3290418
 1:46 am on Mar 23, 2007 (gmt 0)

Hello all
This is my first post, I have some problem with my income tax for year 2006.

Here is my story:
I live in US and earn money from adsense, google sent me the 1099 for the year 2006.

I hire 2 writers in India to work for me last year.

I paid the writers about $30,000USD for the year 2006.

How do I do my income tax?

Please tell me what to do!

 

goneinthesun




msg:3290424
 2:02 am on Mar 23, 2007 (gmt 0)

you need company invoice with contract from them.

europeforvisitors




msg:3290429
 2:09 am on Mar 23, 2007 (gmt 0)

Why not get help from an accountant?

[edited by: europeforvisitors at 2:10 am (utc) on Mar. 23, 2007]

hieuvnguyenaz




msg:3290430
 2:09 am on Mar 23, 2007 (gmt 0)

Hello Goneinthesun
Can you please give me more detail? How do I send them the 1099 if they don't have SS?

jay5r




msg:3290464
 2:48 am on Mar 23, 2007 (gmt 0)

You're running a business - so it's time to get serious about it and take some time to understand expenses and income.

In this case, you'll need good receipts for all your expenses. Assuming you don't have a proper business set up, you just put your business expenses and income on your personal taxes.

Good luck!

gabby




msg:3290465
 2:52 am on Mar 23, 2007 (gmt 0)

I paid the writers about $30,000USD for the year 2006.

Any business that has $30,000 in expense per year should hire a CPA for tax advice -- Any business including an online business!

Forget any advice you get online -- get a professional.

Any extra money spent for an accountant will be more than offset by tax savings or the avoidance of penalties for tax prep errors.

hieuvnguyenaz




msg:3290467
 2:57 am on Mar 23, 2007 (gmt 0)

So it is not good to hire people over sea? The labor is cheap however we can not send them the 1099!

Please help! I been talking to sevaral Income Tax Services and most of them don't know much about this. And they don't want to deal with it.

Compworld




msg:3290476
 3:04 am on Mar 23, 2007 (gmt 0)

Go to a Jackson Hewlett or H & R Block and they should be able to sort things out for you. After that, you should incorporate and file for sub-chapter S status for this year starting. One of those two firms could help you set this up.

Judah_Ben




msg:3290658
 7:42 am on Mar 23, 2007 (gmt 0)

I'm no tax profesional, but I have had some experience with conducting business from the US to overseas. I've been paid from companies overseas, and paid for services overseas.

Like was previously mentioned, you should always get invoices for any service you paid for.

Most of the companies I've dealt with overseas have some type of US business tax identity (EIN number). A serious overseas company will usually have one. In that case, I believe you could 1099 them. It's difficult for overseas companies to get US tax indentities, so not every one has one.

If you absolutely can't get an invoice, you may be able to use your bank statement, but you'll need to talk with a profesional to make sure that would fly.

Someone also mentioned that you should get serious and educate yourself. I agree, you should avoid asking webmasterworld for tax advice. Do what you got to do to find a local tax consultant who you can ask these questions to, do your best to educate yourself on what's an expense, and the best way to track them.

But hey, I only learned some of this stuff because when I started, I didn't know either.

-JB

jetteroheller




msg:3290685
 8:25 am on Mar 23, 2007 (gmt 0)

So it is not good to hire people over sea?

Where has anybody written like this?

The only problem is, to proof, that You have paid for their work.

If You can show invoices and bank transfer data, everything is fine.

The same problem would be, when You pay somebody in the US just without any papers cash.

Pengi




msg:3291132
 5:21 pm on Mar 23, 2007 (gmt 0)

This is not AdSense issue, it is simply a business tax issue.

But it will obviously apply to all AdSense users many of whom wil not be familiar with the standard requirements for business and personal accounts for tax purposes.

There will be local rules that apply for what income you must declare and what expenses you can claim for. This is where an accountant's advice should be sought.

In general, you should expect to pay tax at the locally applicable rate on your profit. Butyou will need to provide proper evidence in support of all expenditure you claim as costs.

You need to demonstrate that costs where actually (and legally) incurred as a legitimate expense. Just demonstrating that the money was paid will probably not be enough - after all, what's to stop me from just paying all my profit to, say, my sister who lives overseas in order to avoid paying any tax on it.

Go60Guy




msg:3291222
 6:28 pm on Mar 23, 2007 (gmt 0)

Go to a Jackson Hewlett or H & R Block and they should be able to sort things out for you. After that, you should incorporate and file for sub-chapter S status for this year starting. One of those two firms could help you set this up.

Yikes! Tales are legion of firms like those, who are set up mainly to prepare simple wage earner tax returns, royally screwing things up for people who have more complex issues.

Follow the advice to get a good CPA. It sounds like you need some good, on-going professional help. For instance, setting up a subchapter S corporation is not always the answer. It depends on a lot of considerations.

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