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joined:July 8, 2002
You should try filling in all the screens at an online tax preparation service. If that gets too complicated it will have been good practice for talking to a local tax preparer. Don't wait 'til the last minute, do it now.
Go right away and not get hit with taxes at the last minute with nothing in the bank to pay them :)
I paid mine but BOY! they really surprised me. I had to pay all my social security tax, my federal tax on both income and a portion of my Social Security income.
I wasn't expecting all that at once...had me scraping the barrel with a spoon!
You are paid via 1099 unless your a corp. In the U.S. you will put this income on a schedule C and there you will deduct exspenses. and pay an additional 10% self employment tax for the 1099 income. Plus the regular tax.
If you are a corp. the corp will pay basicaly 15% less exspenses then the corp profit is put onto your personal taxes and you pay on that.
In either case the IRS will be notified as to your income from Google.
There is no way to avoid this. just keep track of all exspenses and if it looks like you making too much. Invest in new stuff. Thats how I now have a super speedy AMD64 dual core with dual double layer DVD burners, 2 250gig HD and a nvidia 6800gs graphics card.
C corps and S corps pay taxes differently. As an S corp, all earnings pass through to me individually, and I pay tax at the personal level. I pay myself a salary, which saves on the FICA tax.
Yes, you can reduce the amount of tax through deductions, but they have to be business-related. Don't try to cheat because the IRS is all seeing, all powerful.
Thats how I now have a super speedy AMD64 dual core with dual double layer DVD burners, 2 250gig HD and a nvidia 6800gs graphics card.
joined:July 8, 2002
Abuse is not allowed, but a resort consultant going to resorts, or a sports equipment maker going to sporting events is "work."
There is indeed a lot of abuse along these lines but that would be between the taxpayer, his or her conscience, and the IRS. Audits and threats of audits tend to curb the abuse.
When a restaurant critic eats at a five star restaurant incognito the bill, including tip, is a business expense--even if she enjoys the meal. Even second, third, and fourth trips to sample other menu items would be allowed but at some point abuse does occur.
People who routinely take such deductions usually understand the rules.