How does an Internet entrepreneur report his income to the IRS? Does he even have to?
I made a small amount on money on Fiverr earlier this year. Less than $300, more than $150. My fiverr gig involved croudsourcing (shorttask), paying people a small amount of money to do simple tasks such as commenting on a video. It isn't just earnings, it's earnings-expenses.
That money is in my paypal. If I fail to make over $600 this year, do I need to pay taxes? I want to withdraw some of it to my bank. Do they report withdrawn money to the IRS? Because at this point I have not made a lot of money - I made about as much as someone would make selling old stuff from his garage on ebay (and I DID sell an old DS). And if my earnings remain small - just $200 - I probably won't bother reporting. So would it be safe to withdraw to bank or do I leave the funds in my paypal.
Now, I plan on doing something else. I want to sell a product of service in the freelancer marketplace (freemarket.com). To promote the product or service I want to hire a marketer through freelancer.com. Projected profits: $300. That might bring me OVER the $600 mark for the year.
Do I need an Employer Identification Number (please tell me I don't - if yes I'm screwed)? I won't go to one of those expensive tax prep specialists (doing so would defeat the whole purpose leaving me with 0). I will use TurboTax. I won't be deducting Internet, housing, phone, etc. because I still live with my parents. And If I do report this income, how would I go about doing it? I have no company name, no EIN, no nothing. I want to at least deduct the expenses resulting in hiring a freelancer and using shorttask. Do I need to jump through hoops or go through red tape? Because I want to hire a freelancer this week.
Please answer the questions. Would withdrawing something to my bank raise a red flag or is it safe? Do I need to report income quarterly or April 15 when everyone else does? How do I deduct my small expenses from this? And should I drop this whole thing, take the small amount I have earned and walk away?
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Dan's content is irregularly read by handfuls of people. Join the elite few by reading his blog: dcrBlogs.com, following him on Twitter: dcrTweets.com or reading his fiction: dcrWrites.com but NOT by Clicking Here!
Dan also writes content for hire, but you can't afford him anyway.
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When the Roads and Paths end, learn to guide yourself through the wilderness
Beyond the Path
Sal
When the Roads and Paths end, learn to guide yourself through the wilderness
Beyond the Path
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