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I have a question.
can anyone tell me please how the TAX from the earnings of the US publishers is deducted?
Does google, bank or tax department deduct the tax and when it is deducted?
I receive the same amount of check as shown in my account (no deduction of tax yet I think so).
Your guidance will be highly appreciated.
At the end of the year Google will send you a statement showing how much you earned and how much tax "you" have paid in. It all depends on how you filled out the tax forms when you joined up.
Since you can deduct your expenses against your earning, even if google wanted to, they would not know how much to deduct. What if you spent more on adwords to make the money in adsense.
Besides there is a little thingy called the Uniform Privacy Act. IRS cannot tell Google or anyone outside of other Government or State agencies any information about you or your tax liabilities.
If you filled out the tax forms claiming an exempt status then nothing is deducted.
Google does not try to figure out your expenses, etc. they only withhold according to what you tell them on the withholding tax form that you had to fill out.
You will get a 1099 at the end of the year. Google will use the tax information you provided in order to prove to the government that they paid you that money, and they can write it off of their taxes as an expense.
However, you can write off all your web hosting, site developement and all related expenses against your Google earnings.
If you do not know how to do this or understand what I am saying...get yourself a tax accountant. Do it now, not next April...
I would say that Google has to or we would not have to fill out the tax forms.
Nope. If you're a U.S. resident, you filled out a form so that Google could report your earnings to the IRS and to you on Form 1099-MISC, which is altogether different from the W-2 form you'd receive if you were an employee and Google were withholding taxes.
As an AdSense publisher, you're self-employed (at least as far as Google is concerned). Assuming that you earn enough money from AdSense and/or other sources to justify keeping track of business expenses and the like, you'd normally file a Schedule C (Profit or Loss from Business). You enter your AdSense and other self-employment income on Schedule C, deduct your allowable expenses from the gross amont, and transfer the net (after deductions) to the appropriate line of Form 1040. If you don't understand any of this, you should look up "Schedule C" in Google and read some basic articles on the topic. Using a tax program like TurboTax or TaxCut is also a good idea if you don't use a tax accountant.
I can see a potential for a lot of guys to get into tax trouble if they are not careful.
I've been happily receiving checks for more than 2 years without anything being withheld.
On the other hand, I file Schedule C and quarterly estimated taxes, so IRS has all their money.
If you go to this url and read the thread this will be all cleared up for everyone. I was right on my first post.
Please read this to put misconceptions to rest.
There are even more misconceptions in that thread than this one.
Again, I strongly recommend to everyone who does not understand even the most basic tax laws and implications of running a business (e.g. getting paid for Google Adsense), get an accountant.
As someone else mentioned, next year the business will need to pay quarterly based on prior year's income.
Note that if you make more than about $87K it is often worthwhile to incorporate because you will save about 15% on income above the $87K. And, you can save even more because you can often get away with a small salary - like between $25K and $50K. You only pay FICA, etc on your W2 salary figure.