Adsense tax?

[PCGUY112887]

First off I would like to say that I don't believe this site uses Google Adsense (don't see any right now)... I was banned from a huge forum a few months ago because I made a post asking how people liked the Adsense service... turns out that forum uses Adsense and it's against google's TOS to talk about it... so I was banned :cry:

But anyways... if this somehow breaks some kind of TOS OCforums has with Google, please delete not ban! :cry:
O and I stuck it in Internet forum because Adsense is part of the net.. but then again tax is not so move if in wrong area please ;)


Anyways... I am 16 and have a fairly popular website going with about 20,000 hits per day and growing... and I have decided that I would like to make a bit of money off this (mostelly to pay for hosting). As you know, I am 16 and to sign up for Adsense you must be 18... so I must go under my mom's SS # and show it as her making the money... and she's worried about the tax on it.

I have no idea how this tax would work... right now we are bairly consided "Low Income" and a few hundred $$ more and she would be above the "Low Income" status. She doesn't want to loose that status because it's a bigger tax break... she's also not sure how the tax works for self employed business... which I think the google profits would be considered.

After reading a bit online it seems that when tax time comes around each year, along with normal W2's she would get 1099 forms for the google income... how exactelly do those work? Since it would be on another form... would it count as "normal" yearelly income and be able to push her out of the "Low Income" status? Could someone that has done this/done similar inform me so I can tell my mom how it works so she will at least give our taxy lady a call? I don't want to screw over my moms taxes for a few grand a year for me...

[mysubaruimp]

If she has her own business..

Have her "hire" you with a salary of whatever the income from google is. Then you file your own taxes on the income.

[IrQ]

Keep in mind with this answer that I am no expert.

From what I remember transactions made by strictly online busniesses don't incurr tax penalties. I looked into adesense and basically you are selling them web page space and bandwidth. You are selling them a product.So basically you are selling google a product. From what I remember you don't have to claim internet based income federally.

At the same time federally the were trying to pass a bill to tax internet based income a couple years ago. It never passed but state to state tax laws differ. In california if you own a website say for example NewEgg and a customer that also lives in California buys something from your website you have to charge them sales tax. But if a customer lives in PA you don't.

This is a very very grey area. I would highly suggest calling a tax broker in your town specifically as they could tell you exactly what it falls under for Federal tax, state tax, and local tax. Also explain to them them exactly what the service is and how it works. Also explain to them that you get a check mailed to you. And as I said this is a very grey area so call 3 or 4 different tax brokers in your area from diferent firms as they all might have different answers.

[RoadWarrior]

IF you're just expecting it to partly cover hosting, then it shoudn't be a problem, because with the cost of hosting as a tax deduction it won't put the overall income up any. Also you can get deductions for the computer you've got in your house and the "office" around it, that you use to run the business (portion of light, heat, rent etc) So if you add all that in right, it will counterbalance it.

If you end up $100 in the black still, I can send you a bill for a site security scan costing that much for $5 in my paypal :D

Road Warrior

[PCGUY112887]

Well hosting is only $70 per year... and I would probally make a few grand per year :p

[RoadWarrior]

Well if you're growing that much, it won't be $70 a year for long :-/

[PCGUY112887]

So far 3gigs of storage and 25gigs per month of transfer is plenty for me.