Tax question

[Amanda]

I was wondering, does Google send us any forms for our taxes, to show how much we made?

[The Contractor]

They should be out by the end of January if in USA

[greatstart]

Do they consider the income from Google as Self-Employment tax? In other words, do you have to pay an extra tax in the U.S.A. besides federal tax? I think it is 15.3%.

[europeforvisitors]

Go to the IRS Web site and look up "Schedule C."

Or search for past threads about taxes in this forum.

[adamxcl]

It is self-employment income but it's not really an "extra tax" either. You just have to essentially pay two shares since you don't have an employer to pay their share of taxes for you. So you are paying more out of your own pocket because you made it all yourself.

Remember to pay estimated taxes 4 times a year if you make more than few hundred dollars a year. It's the equivalent of tax withholding out of your paycheck. If you don't do that, and you are just writing a one-time check at tax time, you will have to pay penalties.

[NoLimits]

Anyone have any ballpark figures on the percentage that they tax this income at in the states.

40%? 50%? Should I go get the rope... anyone know how to tie a knuse?

[europeforvisitors]

The tax rate depends on your income-tax bracket and on whether the net income is subject to self-employment tax (a.k.a. Social Security tax), which it is for most people who don't have extremely high-paying day jobs.

Your AdSense income is self-employment income. You'd normally declare it on Schedule C, which is used for calculating a profit or loss from a small business. (On Schedule C, you enter your self-employment income, add up your legitimate business expenses, deduct the expenses from the income, and transfer the resulting profit or loss to the appropriate line on Forum 1040.)

If you use a program like TurboTax or TaxCut, the software will take you through a questionnaire and complete Schedule C and related forms for you.

[steve40]

Amanda
Mine last year together with state and federal tax was over 40% but that is only on income after business expenses home / office / SW / HW / hosting 401K etc. etc.

IMHO use a CPA for preparing taxes as they helped me with understanding what was and was not deductable .
One thing to note is that as well as needing to pay any taxes outstanding from this year the first of the Quarterly payments for current tax year will need to be paid often taken as 1/4 of last years tax liabilities at or near the same date as final tax payment for last year

just my 2 cents and I am sure many on this board know much more
steve