Sunday, February 3, 2008

Your Adsense Payment(s) And Income Taxes

I got an audit notice from my local tax administrators concerning my 2006 adsense earnings. I, of course, reported my adsense income but there was no W-2 that was included with my tax return and that was what the audit is all about. Now normally people would think that this would be an occassion to panic (which I did at first) but since I have worked for both H & R Block and the IRS I had some experience with the whole "tax" thing.

So I called up the tax office to find out what the problem was. Basically speaking all income reported has to be backed up by an accompanying form of proof of that income. Since my adsense income was so low - it was only for two months - adsense did not send me a W-2 form. Here is an excerpt from adsense's site:

Will you send me a Form 1099 or 1042?

Publishers are responsible for paying their own taxes resulting from participation in Google AdSense. In order to facilitate this, we send IRS forms 1099 and 1042-S to qualifying publishers as required by US tax law. Forms will be sent before the end of January 2007.

We will send a Form 1099 to you and the IRS if:

  • You submitted a Form W-9, are not a corporation, and were paid at least US $600 in 2006 OR

  • You indicated that you are subject to backup withholding and had taxes withheld

We will not send you any forms or report your earnings to the IRS if:

  • You have signed the declaration of No US Activities OR

  • You have NO earnings from the AdSense program OR

  • You have submitted a Form W-9 as a corporation and did not have any taxes withheld OR

    You have submitted a Form W-9, made less than $600 and did not have any taxes withheld

To find out more information about this just click here to go to the Adsense Help site.

According to my local tax administrator(s), I have to let them know the reason as to why there was no W-2 form included with my tax return. So I have included an excerpt from the Adsense site itself as to why there was no W-2 form included with the tax return and I will let you know how everything goes.

No comments: