First of all adsense won't be sending you a tax form if you have made under a certain amount - which is around $400 - $600.
According to my federal tax return you have to report your adsense income if it is over $400 because you are liable for self-employment tax! Now the interesting thing that I have found out is that while you are going to be taxed, you are going to be able to cut your self-employment tax in half and only be taxed on half of the self-employment tax that you owe. Adding to that there is something else called the Earned Income Credit and if you qualify for that then you get more of your owed self-employment tax slashed.
So far it looks as though I'm going to be paying about $1 to $5 dollars in taxes as far as my adsense earnings go.
I haven't actually started doing my income taxes yet. I want to be ready with all my comfort tools before I actually get started and tackle this thing!
March 3, 2009 11:14 PM - Googlecash said...
Hi, I was not in a good financial position back in 2004, Then I found Google adsense, Its the best program to earn money online, I started slow, I was making $20 a day in my first year, but I worked really hard and Making money online is not easy, You have to put in lots of efforts every day, I did, But now my life has changed completely, I make over $3000 a month, This gives me lots of freedom, I have made many friends online and I did learn lot from them, I wish best of luck to any one who is starting up.
Liza form Google cash
4 comments:
Actually I completed and mailed in my 3 income tax forms! I will be getting a refund from my federal taxes. I broke even on my state taxes and I don't have to pay income taxes on my adsense earnings because I qualified (just barely) for their tax exemption.
But I would like to say that I was able to deduct some of my "business" expenses like my printer cartridges and some business supplies. They are legitimate expenses but since this is the first time that I was able to do it this way I'll wait and see whether or not I'll get my full refund in kind!
If you only made $100 from adsense last year would you still need to report it? Thanks!
Sister2Brother - you are right, you can deduct expenses like web hosting, internet service, cell phone, office supplies, etc. if they are utilized 51% or more for the sole purpose of your business. You can itemize these deductions on schedule C - make sure you have proper documentation/proof if you plan on doing this.
Jennifer - If you only made $100 you will not receive a 1099-MISC form from Google and are not required to report your earnings.
This article has a lot of other AdSense tax info - http://startupfiance.com/2009/paying-taxes-on-adsense-earnings/
Yes, I agree with Amanda. If you made only $100 or less with Adsense then they won't be sending you that yearly form and you don't have to report it.
However I'm not clear as to whether or not you would have to pay taxes on it if it was an additional source of income - in other words did you make an income from something else?
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