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  1. #1
    Member
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    June 6th, 2011
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    Does adsense withold tax from American?
    I want to JV with some guy in US. I send traffic he send me 70%.

    Well, he said that IRS takes 22%. I think he should only pay 22% out of his 30% right, not the whole thing? Is this his trick?

  2. #2
    ...and a Pirate's heart. Convergence's Avatar
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    US Businesses / Individuals are responsible for reporting their income.

    If taxes are not withheld at time of payment by a company, IE: the Google for Adsense, the company ie: the Google will issue a Form 1099 when income reaches $600, to the US Business / Individual and a copy goes to the I.R.S. -

    It is then the responsibility of the US Business / Individual to report and pay taxes based on the amount reported on the Form 1099.

    If that US Business / Individual makes $9,000 without your partnership and $1,000 with your partnership, they are required to pay taxes on the total amount - $10,000.

    The amount of tax required, ie: 22%, is dependent on the total amount of all income being reported. Someone earning $10,000 total would pay far less than someone making $300,000 total.

    There are also tax deductions and exemptions that can lower a US Business' / Individual's tax liability.

    Only the person you are partnering with can provide you with a number, ie: 22%, for their estimated tax liability.

    If his tax liability is 22%, and with your partnership you make $1,000, then his net after taxes is $780. Depending on your agreement the split would occur on that amount. If you are to receive 70%, it would be 70% of the net amount ($546) and not the gross amount ($700).

    I am not a lawyer nor tax accountant and have never played one on TV. Consult your local professional guru.
    Last edited by Convergence; June 26th, 2011 at 11:09 AM.
    Salty kisses, Sandy toes, and a Pirate's heart...

  3. #3
    Member
    Join Date
    June 6th, 2011
    Posts
    86
    Essentially this guy is buying traffic from us. So, the amount he paid to us should be deductible from the amount he earned?

    If not we will have to arrange that I am a consultant workiing for him and get paid based on performance.

    Without me he'll be earning $200 per month. With me he'll be earning $2k but has to pay 70% of earning to me. So that $1400 should be tax deductible right?

    It's like buying traffic from Bing/Adwords

    You deduct cost of buying traffic right?

    Quote Originally Posted by Convergence View Post
    US Businesses / Individuals are responsible for reporting their income.

    If taxes are not withheld at time of payment by a company, IE: the Google for Adsense, the company ie: the Google will issue a Form 1099 when income reaches $600, to the US Business / Individual and a copy goes to the I.R.S. -

    It is then the responsibility of the US Business / Individual to report and pay taxes based on the amount reported on the Form 1099.

    If that US Business / Individual makes $9,000 without your partnership and $1,000 with your partnership, they are required to pay taxes on the total amount - $10,000.

    The amount of tax required, ie: 22%, is dependent on the total amount of all income being reported. Someone earning $10,000 total would pay far less than someone making $300,000 total.

    There are also tax deductions and exemptions that can lower a US Business' / Individual's tax liability.

    Only the person you are partnering with can provide you with a number, ie: 22%, for their estimated tax liability.

    If his tax liability is 22%, and with your partnership you make $1,000, then his net after taxes is $780. Depending on your agreement the split would occur on that amount. If you are to receive 70%, it would be 70% of the net amount ($546) and not the gross amount ($700).

    I am not a lawyer nor tax accountant and have never played one on TV. Consult your local professional guru.

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