income tax

[bella258]

How do i keep track of my taxes, how does it work at teh end of the year with income tax??

[kapeh12]

You are responsible for tracking your own earnings (from this site and any other sites you may be working).  The money would be considered "hobby" income which would be recorded under whichever "other income" bucket the tax form you use has.  Some sites may send you a 1099-MISC form if you make more than $600 from their site, but not all sites do that (can't recall if FC does - I'd have to look at their FAQ again).

I use the free version of an accounting software that came with one of my computers (and older version of Quicken).  When I receive money, I created categories for the different sites and classify the income under those category buckets - that way I can use the tool to report how much "misc. income" I made and see from which sites.

Another way to do this would be to create a spreadsheet to track the payments you receive.

Hope this helps.

[CHANEYLAKEGIRL]

You are responsible for tracking your own earnings (from this site and any other sites you may be working).  The money would be considered "hobby" income which would be recorded under whichever "other income" bucket the tax form you use has.  Some sites may send you a 1099-MISC form if you make more than $600 from their site, but not all sites do that (can't recall if FC does - I'd have to look at their FAQ again).

I use the free version of an accounting software that came with one of my computers (and older version of Quicken).  When I receive money, I created categories for the different sites and classify the income under those category buckets - that way I can use the tool to report how much "misc. income" I made and see from which sites.

Another way to do this would be to create a spreadsheet to track the payments you receive.

Hope this helps.

Good advice! Thanks!

[maxinmotion]

Is there a certain amount of money you have to make on the internet before you have to report it the IRS?

[kingreyam24]

Is there a certain amount of money you have to make on the internet before you have to report it the IRS?

I think it may be if you make over $500. I read somewhere that they will send you a tax form if you make over that much to include in your taxes. Try searching for it in the forum. I know I saw it somewhere.

[dlennie]

You are supposed to claim it as income. Whether you do or not, that is up to you. If in doubt, talk to a tax professional.

[angsilva2000]

So far dont have to pay taxes i dont get paid enough hehe

[michaelwoods514]

Make sure you save all you receipts so that you can get some cash back when you file...sometimes people hire an accountant to help them out since figuring out exactly how much to pay can be complicated.

[timetravel]

Up until now I have not made more than a  couple hundred from any one internet site.  This year I think I will make over 600 from two other sites - so I am getting ready for next year's taxes. I've never done anything until now because no matter what my total it was never more than 400 in any one year from any one site - but no doubt this year it will be.  I've already earned over 200 at one site since the beginning of the year and expect to earn much more.

[jstev4506]

The exact income threshold does seem ambiguous. I have heard something about $600 a year from other sites. But then the bigger question is: How much do you have to pay in taxes on this "hobby income"??

[mary_k]

I think it is anything over $599.oo you have to report.

[swogden]

Sites vary, but the general threshold is $600 before the site has to send you and the IRS a 1099 for tax reporting. (For FC the limit is $600.)

If you receive a 1099, make sure you report that income, because the IRS will have a copy and will check your form to make sure it its there.

There are some sites that have a lower threshold, but if they send you or the IRS a 1099, make sure that income is included in your tax return (Federal as well as state.)

The IRS expects you to report all income from all sources unless it is specifically exempt from reporting.  Check Publication X for details or your tax expert.

You should also make a point of keeping track of the expenses you incur:  the fees you paid for upgrades or offers or advertising.  If you are reporting all income, you may also deducted qualified expenses as a itemized deduction in Schedule A but only to the extent that all the special deductions exceed 2% of your adjusted gross income. (Note: you must itemize expenses to take advantage of this.)

If this is a business for you, you need to have earned a profit in at least 3 of the last 5 years -- and reported the income to the IRS.  The advantage of being a business is that the qualified business expenses can be deducted against the business income on a separate Schedule (Schedule C, I believe)  Most people would not bother with this as the reporting requirements are onerous.  But if it is YOUR BUSINESS, you will want to go this route.

[RobertMendez]

YEA ANYTHING OVER 599 MUST BE REPORTED ON A 1099MISC FORM

[ptfunds]

Thank you so much for posting this topic. This is not something I had yet thought about thus far as my earnings have not yet been that big. However, I am building my checks faster and hope to have bigger checks this year. Starting now to track my payments will help greatly at the end of the year this year. Great topic!