Discussion in 'Business & Tax Advice' started by Munch19, Sep 10, 2012.
Dude you really need to speak to citizens advice mate, your not earning your mum is
Thats how the taxman will look at it, does she know about it?
Exactly why I'm posting here, I know there can be some serious consequences if it is found out "she" is earning this money.
She does indeed know about it but I don't think she quite understands that PayPal works in this way, you know how old people are with technology.. Clueless.
It isn't really an option for me to contact citizens advice I have poor social skills. :/
yea man, you unfortunately might run into some problems.
like the other member said, the IRS sees this as your moms money and not yours at all.
she might have some problems with the continuation of getting her benefits because of this paypal income.
i am no expert, but since they are donations, you might be able to be in a different tax bracket.
you just need to do some serious homework on this stuff man, BHW is not really the correct place for this haha.
maybe you should set up a 501 non profit corporation in your name.
Well the Harse reality is this buddy and I don't mean to be rude but you need to speak or at least phone someone who is legally qualified to give you advice
If the taxman finds out which may or may not happen, they will not care about your social skills as it will be your mum who gets the problems as its in her name
I pay an accountant and bookkeep purely because of the fact that you cannot mess about with the taxman, especially of you're claiming benefits, that's fraud, you need to speak to qualified people even if you join to the money saving expert forum and see what they say and get your facts right
hope you get sorted
Ugh. Is it possible for me to somehow put the cash in my way? Even though I'm only 16? Like opening some sort of bank account and having the cash sent as a check and putting it into a bank?
Thanks for all the help btw.
Ya you can go to a bank with your mother and open a bank account. Then just open a paypal and link to that. Really not that hard.
It would still end up going through your mums bank, it doesn't matter where you send it as you (well your mum) has actually earnt that aamount so you will be viable for it
You could (I guess) use prepaid cards
Im not going to say any more as my business are all above board and legal
I would personally tell the taxman, be legal as you wont have to pay much at all on 10k a year, or you launder money about (which is what your doing) and wait for knock knock on your door, which may or may not happen)
You can have an account at 16 every high street bank & building society offers them. Some even have chequebooks. I don't know how old you have to be to get PayPal though.
18 last time I checked and they check with bank
Oh and OP
Well done for getting shit done and setting yourself up
It is 18 but you can still have an account as an minor. But the adult is still in charge of it.
1) Which is your country? tax rules are different each country with IRS rules varying for that country.
2) Paypal transaction history should be printed out as it helps during taxation, do it if you haven't done it. Don't make your moms work even harder when it comes to taxation.
3) Get on some finance or say money savings type of forum. they know a lot of tax details depending on your country. You will also learn some savings tips along the way.
4) Regardless of your country, most of the bank (national or international) have some savings schemes for underage kids. like certificate of deposit or say bond etc. that money is usually tax deductible if that is on your name ( or say childs name if seen from your mom's taxing perspective).
5) You can also open your own bank account and have the savings but money will be routed via your mom (just make sure bank is not unhappy with forex money in underage kids account). Also she will have to pay tax if she is using paypal because paypal co-operates with IRS or taxman from every eligilble country where they are operating. Afteall it's matter of forex money, nothing big or small when it comes to forex and tax.
Thanks for all your help. I'm going to discuss this with my Mum tomorrow and hope for the best.
Does anyone know if the fact that a huge % of the cash was sent to me via Donation matters?
I'm just curious because there are many people out there making similar amounts from gameservers.. I never realised all of this was so serious, got me a bit scared. :/
Does your country expects you to have charity or say some non profit organization before accepting donation status? If yes, then it will matter. For example, Indian users can't use donation feature on paypal. There are many reasons for that.
So as long as paypal has no issues, your donation from game servers should be fine. First thing to be afraid of here is paypal putting banhammer for no reason and second is taxman. Taxation is not scary stuff but paypal is moody, hard to understand their ways of doing business. You are getting a large amount here 1k so stay safe in tax area, you should be fine.
Donations in UK are classed as taxable income. He would have to register as a charity to be exempt from tax under the provision the funds are used for a charitable purpose. His method of income and how it's spent would be checked first before he can register as a charity or non profit.
Whats paypal go to do with anything? Tax is the job of the government not paypal. Paypal are not concerned about whether or not the money they receive is tax deductible and if it's being paid. The taxman (HMRC in UK) is first and foremost the concern. If you don't pay your taxes they can stick you in prison at worst, at best fine you what you would have paid. The only thing he should be concerned about paypal with is their habit of freezing accounts for the sake of it but his income doesn't look like it could cause any issues.
I appreciate all of the replies, thank you so much.
I have decided to take this over to the MoneySavingExpert forums and hope for the best.
In some countries paypal takes the TAX ID and informs the tax dept about the specific income threshold via their medium. For example freelancer earning 1k USD per month for entire year is reported to tax entity via paypal. Happened here in this part of the world. I am not sure about the UK or EU taxman with paypals co-operation on earning.
Separate names with a comma.