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  1. #1
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    June 30th, 2006
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    Do you have to pay income tax
    Hi i was wondering if your ssn is required for verification purposes only or if it is required for sending your payout info. to the irs. so in short do you have to pay income tax?

  2. #2
    Advocate mellie's Avatar
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    You should pay tax on all your income. Over $600 companies have to send 1099. Under that you should still claim it as income.
    Last edited by mellie; June 30th, 2006 at 06:49 AM. Reason: not hitting space bar hard enough, had to separate words. Need more coffee!

  3. #3
    Affiliate Manager Alan Hamilton's Avatar
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    Pay tax
    Yep - anytime a company pays $600 or more for the calendar year to a non W-2 employee (a 1099 contractor) they must send a copy of the 1099 statement each year to IRS.

  4. #4
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    When you say W-2, like I am working and filing my W2, do you mean I am not required to subdue to a 1099?

    Thanks,
    newbienewbiedoo

  5. #5
    ABW Ambassador thecool's Avatar
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    As a citizen of the U.S., you are required by law to pay income taxes on all earned income as well as income from investments, etc.. Companies that pay out over $600 are required to report the income to the IRS. However, even if it is less than $600, they may still report it to the IRS. In the past, I have received a 1099 showing that less than $10 dollars was reported to the IRS. W2, 1099, 1099 misc, etc. means that the income has been reported to the IRS and that you must file accordingly. Companies may report the income to the IRS, but do not have to send you a 1099 unless it is over $600 dollars. So, just because you do not receive a 1099, it does not mean that the income has not been reported to the IRS.

    Gene
    TCS

  6. #6
    MasterMike HardwareGeek's Avatar
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    Just an FYI companies are required to send you a 1099 if it is over 600 dollars. They must send the 1099 to the IRS even if they pay you a dollar.

    I learned that the hardway. I was paying people and the people I paid over 600 dollars i only sent 1099 too. Until my accountant told me its everyone and the IRS audited me a few years back.

  7. #7
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    All income or gain need to be reported to IRS (more than $10) - including revenue from commission, adsense, bank interest, stock sales, salary, payments for services rendered etc - it is better to be safe than get audited.

    Open up a company and then you can claim your computer hardware, PPC cost, hosting fees, and many other items as expenses. You can claim the space for home office as business expenses but it has many other restrictions - so you have to be careful.

  8. #8
    Full Member
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    Quote Originally Posted by Xion
    Open up a company and then you can claim your computer hardware, PPC cost, hosting fees, and many other items as expenses. You can claim the space for home office as business expenses but it has many other restrictions - so you have to be careful.

    Those things are expenses even if you don't register as a company. At least that's what my tax person told me. All PPC is deducted right away, as well as hosting fees. It's different with the hardware, but still deductable.

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