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Taxes, Taxes, and Taxes

Discussion in 'Business & Tax Advice' started by agag2, Jan 27, 2013.

  1. agag2

    agag2 Supreme Member

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    Hello

    I have several tax related questions, wondering if anyone can help:

    1. If I make money through Internet marketing & then invest that money in the stock market and loose it all - am I liable to pay taxes on the income made in Internet marketing ? Next, assuming, the answer to the first question is no, do I need to at least report that income to the IRS ? Or I don't report it until I'm obligated to pay?

    On a similar note, what if I invest the $$ in developing a piece of software instead of the stock market?

    2. Do I have to pay (or report) taxes on money made through IM before I withdraw the money from my PayPal account to my bank account? If the answer to that is yes, what if my PayPal account is locked for 180 days - do I still need to pay / report that income?

    I am from the USA

    Thanks
     
  2. agag2

    agag2 Supreme Member

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    Anyone ?
     
  3. christianbed

    christianbed Jr. VIP Jr. VIP Premium Member

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    1. Yes, you need to report all income, regardless of what you do with it after receiving it.
    2. Yes...it is considered income when received.
     
  4. natmicon

    natmicon Newbie

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    Why would it matter if you lost it all due to poor investments? If taxes worked that way, everyone would just gamble their tax% away at the casino.

    Whatever you earn is what your taxes are based off of. If you make it, you pay for it
     
    • Thanks Thanks x 1
  5. agag2

    agag2 Supreme Member

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    I am not gambling my tax money I am I investing all my IM money.

    Theres something called capital loss.
     
  6. shesdead

    shesdead Jr. VIP Jr. VIP

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  7. HoNeYBiRD

    HoNeYBiRD Jr. VIP Jr. VIP

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    since 01.01.2011 Paypal is required to report the sales information of US residents to the IRS when the received payments exceed both of these milestones in a calendar year:
    - $20,000 in gross payment volume for goods and services
    - 200 payments
     
  8. zebrahat

    zebrahat Elite Member

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    Disclosure: I support a "tax honesty" approach as defined in places like SEDM.org, which holds most Americans are not required to pay or file.

    1) NO, you don't have to report and are not liable, BUT you should get your transactions and assets out of your name (and separated from a SSN) as much as possible, or use pseudonyms/non-US addresses to circumvent the (usually erroneous) presumption that you are a person who must pay/file. Avoid activity that automatically triggers third parties to feel compelled to sent out information reports (W2s, 1099s) that create a paper trail that in turn creates the presumption you owe, or tracks you by slave number.

    2) Again no, BUT you have to work at a lower profile to avoid the presumption that you have to---yet you seem to be doing the exact opposite. Why use a snitchy PP account for most of your IM money making, when you can take payment by check, and apply for IM programs using an off shore address so it's not automatically associating your account with US tax reporting rules in the first place? You seem to be asking whether or not you should pay/file, while robotically going through all the motions that make it seem like you must pay/file.

    Again, if you perform activity under your name above a certain threshold, using entities that routinely send info tracking your private financial transactions by SSN (as stock companies, standard PP accounts, or most bank accounts do) to the IRS, they will presume you must file and must owe. So, to repeat, keep your activity out of your name, separated from the assigned SSN, and not obviously associated with the 'US' (which statutorily is different than "USA" for tax purposes, just as not all earnings are income, when the details of the law are examined). You have to actively re-structure your transactions to keep them private, not carelessly make your financial life a fishbowl and only then ask if you can be not thought to be a fish.
     
    Last edited: Jan 27, 2013
  9. burnett4congress

    burnett4congress Jr. VIP Jr. VIP Premium Member

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    The answer depends, like everything, on how you have things structured.

    If these activities are in your personal name, then your stock losses are limited to $3,000 a year. So if you make $20k and lose $20k, your taxable income would be $17k.

    In a corporation though, it's a completely different story. In a corp you'd have no net income.
     
  10. stafyvis

    stafyvis Newbie

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    It is all standard and by government of every country.
     
  11. DeniX3

    DeniX3 Regular Member

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    @shesdead you can escape from taxes, but not from death. ;)