Adsense (taxable income) question

[aygabtu]

Let's say you work a regular job but also have a successful website making say $30k/year or several. No, that is not me!

But if you did and you also had a child over the age over 18 and in college, or grandparents who are retired? What would prevent you from turning 'ownership' of a site over to them so you can take advantage of the lower tax rate?

Sorry if this is in the wrong forum.

[Marketing Fool]

Great question...

You really need to talk to a CPA (certified public accountant) for the answers to your questions.

It's a gray area...might be skirting some tax laws...

My gut says that if they are involved in the business in some way, you're fine doing what you suggest. If not, then you're probably breaking some law...would you get caught? Who knows...

Talk to a CPA.

[bigcat1967]

But if you did and you also had a child over the age over 18 and in college, or grandparents who are retired? What would prevent you from turning 'ownership' of a site over to them so you can take advantage of the lower tax rate?

I would talk to a CPA as well. You don't wanna be messing w/ Uncle Sam...

[yukon]

Originally Posted by aygabtu

Let's say you work a regular job but also have a successful website making say $30k/year or several. No, that is not me!

But if you did and you also had a child over the age over 18 and in college, or grandparents who are retired? What would prevent you from turning 'ownership' of a site over to them so you can take advantage of the lower tax rate?

Sorry if this is in the wrong forum.

If that child in college gets any type of financial aid for school, you better think twice about this.

They could easily lose all their financial aid, because their personal net worth is higher.

You will be 100% responsible for all Adsense tax money, not anyone else. Adsense has your tax ID number, that is reported to the IRS.

[yukon]

Why are you trying to scheme the IRS on tax money?

Looks like your asking for trouble, IMO.

[paulgl]

Tax rate has nothing to do with being in college, over 18,
or retired. 65 or over gets a bigger deduction.

You mean pay less taxes than you on the income?

The money would count against the student when getting
financial aid. If the couple is on social security, they
can earn only so much before the SS goes down if
they have not reached full retirement age.

No matter. If you are making $30,000 and you are not
paying quarterly, or some other time, you should be penalized.

There's no reason to talk to a CPA. I can't imagine why people
would suggest such a thing. How about a tax lawyer? That
might me prudent. A tax lawyer will help you shelter it the
way google does. They earn billions, but they pay almost
zip in taxes because all is kept offshore. So, go offshore.

There are various ways to incorporate as well, eliminating
self employment taxes, among other things.

The best advice is to man up and pay what you are expected
to pay. If you end up owing a lot, you need to start paying
quarterly.

Paul

[yukon]

Still regardless of how OP tries to include other people (HUGE mistake) in his tax bill, OP is still 100% responsible for all Adsense tax money, that will never change as long as Google Adsense reports OPs tax ID earned X amount of money per tax year.

You will not get around the fact that your tax ID is tied to all earned Adsense money.

You could set things up as a real business (tax ID etc..) & only pay yourself something low like maybe $20K per year. Then get legally creative with tax write offs.

[aygabtu]

I understand they have my info, but as an example, you decide to sell your site to someone else. Well, they are going to setup their information with google adsense to earn money off any future ads to the site.

What is to stop someone from transferring ownership to someone with low income so the tax burden is less? For those wondering why it would be less, if my wife and I make say $100k/year our tax rate is much higher than someone who makes nothing, so the extra money made on the site will be taxed less.

I see nothing illegal about putting it in someone else's name. It is not a business entity yet and google doesn't know who developed or maintains the site. What is illegal about giving over ownership to one of your kids or grandparents? It's not a piece of property or something 'owned' or an asset of a business.

As far as losing out on financial aid, we earn too much for them to get any anyway.

I'm not going to follow through with this. I was just curious what peoples thoughts were on it and had it crossed your mind.

[MikeFriedman]

Technically, you could probably get away with it. However, if there was an audit, you better be able to show that money going into a bank account in your kid's name without your name anywhere near it.

[theverysmartguy]

The only way to actually transfer the adsense "ownership" to someone else is to have all the adsense ads on the website(s) in that persons name. That means the that adsense account that is making the money from the clicks would have to be in the other persons name.

You can't just transfer the ownership of the website and say they are the ones making the money when the adsense account is technically in your name. And no, your adsense account can not be transferred over to someone else.

And yes, the sites can be considered a form of property, even if it is virtual. If you have a website that is making you 30k a year, that is an asset in your name.

And about Google knowing who maintains and owns the site: They really don't care, the only thing they care about is who the publisher ID belongs too, the ID that is attached to all the ads you put on your sites.

-- Jeff

[theverysmartguy]

Oh, and I think that your energy would be put to better use creating and building more web properties to increase your income instead of trying to game the system.

-- Jeff