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Do I have to pay taxes on filesonic earnings?

Discussion in 'Business & Tax Advice' started by zep123dmc, Jan 26, 2012.

  1. zep123dmc

    zep123dmc Junior Member

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    As you've probably heard, filesonic removed their affiliate program several days ago. I made over $600 with them last year, so is it necessary to report those earnings to the IRS? And, filesonic never asked for tax info/ SSN. Also, I'm a USA resident
     
  2. Kickflip

    Kickflip BANNED BANNED

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    Legally yes. If you receive payment in return for services completed as a business activity with an expectation of profit, you must pay taxes on that income. Seeing as you are on this forum, it is part of your business activities and you expected a profit, and not just a coincidental result of casual activities, so it is definitely taxable income.
     
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  3. TheFinal

    TheFinal Newbie

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    In your case it wouldn't be Filesonic's duty to collect tax information from you, individuals are meant to be responsible for their own earnings.
     
  4. marcj

    marcj Newbie

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    You need to file a 1099
     
  5. Kickflip

    Kickflip BANNED BANNED

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    Why would you bump this thread with incorrect information?
     
  6. LeeGiS

    LeeGiS Registered Member

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    What would happen if the person did not pay the taxes? Is the U.S. government actually able to find out how much money you make if the money goes to PayPal?
     
  7. volund

    volund Senior Member

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    Honestly if it was $600 the chances of getting caught are pretty small. Really though for that little amount of money why take a chance. Any money that you collect other than cash that never sees a bank can be traced by the Govt. Really if you only made $600 you probably had hosting, some seo software and other expenses that will will come out of that $600 so in the end you are only paying taxes on $200, so you are talking maybe $30-$40 bucks in taxes. Does it really make any sense to risk having a problem with the IRS for that little amount of money?

    There are plenty of legal ways to lower your tax bill, plus there are expenses that are a bit borderline if you want to get aggressive. It really makes no sense to just not file on any income that is not cash.
     
  8. LeeGiS

    LeeGiS Registered Member

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    So if I s*ell a book on amazon and a pair of shoes on ebay, I should pay taxes of that as well?

    On the other hand, what if my friend sends me a payment on PayPal, would that be taxable as well? Does the gov't have the way of figuring out the way what is taxable, or do they just tax everything you get to your account? Or do they just let you be honest and tax what you want?
     
  9. Heineken

    Heineken BANNED BANNED

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    if u are in usa yes u need to pay !
     
  10. volund

    volund Senior Member

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    Seriously dude it is not brain surgery....

    Selling stuff to make money as a business Pay your taxes.....

    Getting rid of stuff you do not use any more than no.

    The key here is going to be between these two points.

    Selling your used stuff----You most likely paid more for it than you are selling it for, technically no profit. Now there may be some dollar amount at which the Govt might look at what you are doing but chances are if you are really just getting rid of stuff you do not need anymore you do not have a problem.

    Buying stuff to sell----You buy stuff cheaper than you are selling it for, you are making a profit on purpose, this is a business. You only pay taxes on the profit part. Buy something for $15 sell for $20 you pay taxes on the $5 minus any other expenses.


    It is not like you do not know whether or not you are trying to make money or not. If you are trying to make money as a business file your schedule C and call it a day. Taxes are just a part of doing business like any other expense, figure them into your prices and they should not be a problem.

    If you think you can get away without paying you can do that as well. Maybe you can, a lot of people do but for me taking a chance on having the IRS crawl up my ass because I did not file my taxes just does not make sense. Claim as many expenses as humanly possible? Yes. Just hope they do not notice my income. Not a chance , the risk vs reward thing is just too high. Save a few grand a year vs going to prison for tax evasion, I will just file and pay thank you very much.
     
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  11. LeeGiS

    LeeGiS Registered Member

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    I actually looked up PayPal's policy. They only report you to IRS, if you are making more than $20,000 and more than 200 sales a year.

    And there's no need to get angry. I can't pay taxes under my name because of the limitations on my v*isa, so I am just wondering my ways out.
     
    Last edited: Feb 20, 2012
  12. volund

    volund Senior Member

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    There is another thread where apparently Paypal does not always use their guidelines when sending out the 1099s so apparently being under those numbers is no guarantee.

    Bottom line though is that whether or not Paypal reports your numbers or not that has no bearing on the rules. The IRS could tell Paypal 2 years from now that they want all their info from the last 7 years and Paypal would give it all up in a heartbeat.