how do I pay income tax on paypal revenue?
I have a small internet business that pays me exclusively though pay pal. The money comes in USD but it comes from a different country.
how do I pay taxes on this, do I have too.
My guess would be that this is self employment income (Its probably going to be about 10 grand by the end of the year)
but thats 15%!! With no deductions! how can i lower this!
- Bostonian In MOLv 79 years agoFavorite Answer
You're self-employed. You file Form 1040 and attach Schedule C or C-EZ to report your income and business expenses. The net profit is subject to income and self-employment taxes. The SE tax for 2011 is roughly 12.6% and will return to roughly 14.1% next year if the law is not changed.
- troLv 79 years ago
this is reported on Sch C and don't rely on Paypal to report to you all that you have been paid, it is your responsibility to have kept records of your income, and your expenses
and if the Sch C 'net' amount is $400 or more you will calculate on sch SE your self employment tax, approx. 13.3% of your Sch C 'net'
on top of this you should have been prepaying on 1040ES what you anticipate your eventual tax will be, including income tax each quarter, April 15, June 15,Sept 15, and Jan. 17, 2012
failing to do so can result in an underpayment penalty
- rhodeLv 44 years ago
you will in all probability be receiving 1099s for those money. Copies are filed with IRS. So i do no longer think of you would be waiting to cover that earnings using a protection deposit container on the financial corporation. Get a common financial corporation account and record your taxes. you're in all probability gonna get dinged for no longer submitting quarterly estimates. Oh, you may take valid corporation deductions yet you rather need some accounting information.