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Do You Pay Taxes On Your Online Earning?

Discussion in 'Business & Tax Advice' started by CashGrower007, Jan 10, 2011.

  1. CashGrower007

    CashGrower007 Regular Member

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    Just say you sell stuff online and your not registered as self employed or a Limited company..

    Will you get caught for avoiding tax?
     
  2. loclhero

    loclhero Supreme Member

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    These questions never stop. What do you mean 'sell stuff online"?
     
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  3. CashGrower007

    CashGrower007 Regular Member

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    As in you provide internet services ie. SEO, Design etc
     
  4. loclhero

    loclhero Supreme Member

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    If you are paid in cash, no worries about taxes. But I would assume your clients are putting your services as a business expense. If so, are they putting any of your info (name, address etc) on their tax returns as an independent contractor? Are you going to receive a 1099 from anyone? If they are there's a chance you'll hear from the irs at some point. Or maybe not. But it sounds like you're just providing some services on a very casual basis and being paid cash with no paper trail for the govt to follow. Then again, it depends how much money you're talking about.
     
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  5. CashGrower007

    CashGrower007 Regular Member

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    No, none of that. It's just basic services paid through PayPal. There's no paper work involved.

    We're talking about 2k-5k net per month.
     
  6. greenfinger

    greenfinger Registered Member

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    May want to doublecheck with Paypal since they just changed their reporting to the IRS. If you receive more than $20,000 in the year and have 200 transactions paypal will report to IRS.

    If you don't have the transactions, (less then 200) keep covering your tracks :cool:
     
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  7. Dark Knight

    Dark Knight Jr. VIP Jr. VIP Premium Member

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    What is the different between online $ and offline $? Now if you think they are both same and you are located in US thn yes you have to pay tax. However, if you are smart enough you can do some here and there stuff to reduce the tax :ranger:
     
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  8. surfer1

    surfer1 Newbie

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    2-5k net per month... uhh the irs will be quick to notice when you don't file your taxes. As said above if "others/biz owners" are paying for your services their generally writing it off as expenses for which your services will show through paypal.
     
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  9. CashGrower007

    CashGrower007 Regular Member

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    Then, I'll have to register myself as "self-employed" and give 40% in taxes?

    Fuck that... There must be a way.

    So, how can I hide my tracks?
     
    Last edited: Jan 11, 2011
  10. zebrahat

    zebrahat Elite Member

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    Not if your IM is working basically with consumers (not businesses), who are less inclined to do write-offs (i.e., pump out information reports that misrepresent the nature of your receipts). If your transactions are done through non-US paypal accounts you shouldn't be under any reporting expectations anyway. it's those (mostly) unneeded hearsay reports that create the problems.
     
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  11. xboxps3wow

    xboxps3wow Power Member

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    How about CPA l__d earnings? they don't sent you anything..
     
  12. 7878

    7878 Executive VIP Premium Member

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    They'll send you a 1099, just like any other US based network that requires a SSN on signup. If they don't, rest assured you're still coming off the balance sheet as an expense, so it's getting reported one way or another.

    As for the OP, saving on taxes is great when you're equipped to get away with doing so. Understand that just letting it go by the wayside and hoping nobody will notice is a sure fire way to get nailed. Ever do the math for penalties on $xxx,xxx over 5 years? Your head will explode.
     
  13. javon11409

    javon11409 Newbie

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    The SE Tax sucks balls. :cussing:
     
  14. englandrm

    englandrm Senior Member

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    Personally, I started an LLC with a partner of mine. Costs about $300. I'm currently looking in to a Delaware LLC (mines not there at the moment).

    Quick and Easy to do. Tax wise, your expenses come first, as long as they are related to your business. You are only paying the taxes on what you keep. There are so many ways to ride up your business expenses, while staying "kosher" with the IRS. (I'm not a tax professional, just speaking from personal experience).

    Before you go out there, and grab a bunch of receipts and mark them off your taxes, talk to a professional First. Make sure they've dealt with an internet company before, and can help you with the write-offs. They aren't free, but they will save you a ton of money in the long run. Keep as much of the money you are making as you can.
     
  15. LottyDotty

    LottyDotty Newbie

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    I just don't pay taxes period =)
     
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  16. howard_hughes

    howard_hughes Elite Member

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    Never paid any taxed yet but I started banking only in the last year:p

    Plan to change that soon as they help you go legit, if you ever need any assistance from banks, govt :)
     
  17. bizroot

    bizroot Supreme Member

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    I pay taxes on my online earnings LOL all my earnings are from my online work and I am doing it through a limited company... Have to pay some where around 33% in taxes... I always add any expense in my balance sheet like freelancer so I don't think you will be able to save your hide for long time... I will suggest you to go through tax professionals and they will be able to help you better...
     
  18. gbmack

    gbmack Power Member

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    Put 20% of your money into a retirement plan. You don't have to pay tax on that until you take it out, which will be a loooong time.

    I put around $50k in a 401k, and it grows a little. It's been 6 months and it's already grown to $53k. I know, it's not much, but I still have like... 45 years till retirement?

    I only had to pay around 30% of my total earnings (after putting some aside for retirement) in taxes... I also had to pay state taxes, and because I forgot to set up a city license, I had to pay around $300 in penalties...

    Taxes and LLCs are a fucking pain in the ass. I think I paid around 1k-2k to form an LLC and hire a CPA to take care of my taxes. Then you need to have a state license, pay state taxes, set up a city license.... Shit lol.

    But hey, it's all worth it, and I bathe in cash everyday ;)

    Online money, offline money, it's all the same. Just pay the taxes. Even if you're a big baller making $10 million a year using offshore Swiss banks, you can still get your ass caught and sent to jail + receive big fines.
     
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    Last edited: Jan 11, 2011
  19. rocket

    rocket Regular Member

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    In my competitor's mind
    the key is in write offs. report your non-cash earnings and get creative w/ write offs.

    you have to show some earnings to get credit for a car, house, etc.
     
  20. dheer

    dheer Jr. VIP Jr. VIP Premium Member

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    Yes I pay here in India but my CA is very smart so I save most of the taxes but still I pay as 100% of my funds goes to my bank. and IT dept of India is pretty strict.