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US taxes for making money online

by Syekahtik
5 replies
I'm 20 years old and make money through web design services online. I accept cash/check preferably but most customers choose paypal, which I don't blame them for.

My question is up to what point can I continue to accept money without paying taxes? Is there a limit on paypal, or just use your own judgement?

I don't make much, but I want to know how much is enough to the point where I should register my business and report earnings. Thanks!
#making #money #online #taxes
  • Profile picture of the author J Bold
    You don't need to register a business to pay taxes.

    Answer, anything over $600/year should be reported.
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    • Profile picture of the author Michael Oksa
      Originally Posted by redicelander View Post

      You don't need to register a business to pay taxes.

      Answer, anything over $600/year should be reported.
      I don't believe that's true at all, and could be a dangerous myth to spread. $600 is the cutoff for filing (sending or receiving) a 1099, BUT you still have to report ALL of your income.

      Contact a qualified accountant, they are a great investment.

      All the best,
      Michael
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      "Ich bin en fuego!"
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  • Profile picture of the author Syekahtik
    I did not know that. So how would I go about paying taxes on Paypal earnings, since I have reached that limit?

    Please keep it in super simple terms, I am pretty young and need "dummy-proof" language. Thanks redicelander
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    Lion Five Studios - Multimedia Design
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    • Profile picture of the author Angela V. Edwards
      Originally Posted by Syekahtik View Post

      I did not know that. So how would I go about paying taxes on Paypal earnings, since I have reached that limit?

      Please keep it in super simple terms, I am pretty young and need "dummy-proof" language. Thanks redicelander
      Paypal offers every kind of report you will need to file. You can either file it yourself or take the reports to an accountant who can do your taxes for you. I LOVE the reports that Paypal offers.
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  • Profile picture of the author kindsvater
    Hold on ... all these "$600" posts are missing the issue of what you're asking.

    You start owing taxes on the 1st dollar you bring in. Registering your business is irrelevant to when you start reporting income to Uncle Sam.

    Because of various deductions and exemptions you will not actually have to pay a tax until you have several thousand dollars in income.

    But your mistake is assuming taxes are not owed unless you register a business.

    - The $600 issue is for reporting on a 1099 form income you pay to independent contractors. It has nothing to do with what people pay you for web design services, unless they need to file a 1099 to report their payment to you.

    .
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