Help me Understand Paypal Taxes. Should I try to Make More or Stay Where I am?

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writtenstyle

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Nov 3, 2008
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Right now, I have made a total of $12,000 in gross paypal payments. That puts me $8,000 under the $20,000 threshold for taxes.(I have more than 200 transactions).

My question is, if I am going to go over $20,000, how much MINIMUM should I shoot for to make it profitable? I do not understand taxes, and I dont mind being falmed for it. But, I do hope some of you guys can give me some advice.

How much more than the $20,000 do I need to make to make it worth going over the $20,000?

Thanks
 


EricVonDoobie said:
What the fuck? Make it profitable? You seriously don't know shit about taxes. Neither do I though.
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I dont mind admitting ignorance, where I am unlearned. I guess what I am asking is, how much more than $20,000 do I need to shoot for...period. If I made $20,001, that would obviously suck, cus then I would get a 1099 or whatever from paypal. I would need to make a certain amount over $20,000 for it to make sense to make over $20,000. Maybe I am thinking about it wrong...I dont know. That is why I asked here. There are some smart money people here.
 
If the money is income you have to claim it whether or not they 1099 you.
 
You have to file and pay taxes even if you made $10.

The $20k part just means they are going to tell on you if you don't.

Pay taxes; don't get raped.

[ame="http://www.youtube.com/watch?v=Z342eU8JYbM"]The Offspring - Pay the Man (Lyrics) - YouTube[/ame]

You sound like you can use an accountant; or at least turbo tax.
 
pay the tax, intentionally trying to aim lower than 20k in an attempt to get around not paying tax is a really really foolish thing to do. Why give yourself a glass ceiling. 9-5 workers work so hard to fight that glass ceiling, for us the sky is the imit and you can make whatever you putyour mind to, and you give yourself a cap.

So foolish.

ALso pay taxes, you might get away with it for a few years, but believe me, they'll catch you eventually, they'l laduit your ass and ask you to explain why you haven't declared any money, or why it is that your bank accounts seem to have activity which seems to imply you are making more money than you claim on your tax returns.

The US government is a bit more clued up about online earnings, UK government is a bit dumb, they don't require anyone to provide social security information to networks.

You can sign up and start making affiliate income and trade on ebay and paypal and the HMRC will not have a clue about it.

Crazy.
 
Thanks guys. Let me ask you this. Should I incorporate or do an LLC or anything like that. Wouldnt I pay less taxes than if I just did it as a person?

Which type of structure should I go with?
 
Wtf... you realize you have to pay taxes on that money no matter what? It doesn't matter if PayPal reports it to the IRS or not. I guarantee you that soon or later PayPal will be required to turn over tax information for previous years and if you didn't pay, you'll be fucked.
 
subigo said:
Wtf... you realize you have to pay taxes on that money no matter what? It doesn't matter if PayPal reports it to the IRS or not. I guarantee you that soon or later PayPal will be required to turn over tax information for previous years and if you didn't pay, you'll be fucked.
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Yea, well I never made more than $3,000 to $4,000 in previous years. I asked a question in this post. MAybe some one can help out? http://www.wickedfire.com/shooting-...ry-make-more-stay-where-i-am.html#post1506358
 
It really depends in what country you are. If you're in us/uk/canada/western Europe then pay taxes. if you're in India/Bangladesh/Pakistan/Philippines, countries which economies heavily depend on people bringing money from abroad, they usually don't bother you much about taxes unless you make $10k+ a month I think.
 
I thought only profits get taxed, not revenue? What's OP on about?
 
I was on about revenue. Paypal even says it is on the total revenue and excludes fees and refunds/chargebacks.

Anyway... File as a single person, or create an Inc, LLC or what before the end of the year? I guess I can do whatever with Legal Zoom?
 
writtenstyle said:
Yea, well I never made more than $3,000 to $4,000 in previous years. I asked a question in this post. MAybe some one can help out? http://www.wickedfire.com/shooting-...ry-make-more-stay-where-i-am.html#post1506358
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Even if you only made $4,000 in a year, you still owe about $500 in self-employment taxes alone. Trust me, you want to pay that. People have gone to jail for less than that.

Instead of asking tax questions on WF, you should be reading up on what taxes you actually need to be paying: Self-Employment Tax (Social Security and Medicare Taxes)
 
lwbco said:
holy crap, OP is a retard

OP, here's a hypothetical situation for you, and hopefully all the answers you need, but you seem pretty dumb so i might just be wasting precious bits on the internet here

1) let's say you made 15k selling dildos from your storefront this year, cash transactions
2) let's say you also provided male prostitution services for 12k, all on paypal [but hey, what you do is none of my business, retard]
3) let's say that the asshole reconstruction surgery cost you 8k, which you're going to write off as an expense (BAD IDEA RETARD, GET AN ACCOUNTANT)

when you report your taxes, you must report them like this (assuming sole-prop, or any business taxed as passthru):
REVENUE: 27k
EXPENSES: 8k
[insert receipts for 18k here]

you'll notice a few things here -- like, for example, we didn't leave out the paypal monies just because they didn't W9 us, and we didn't qualify ourselves as mentally inept by only reporting 19k (27k income - 8k expenses) as our income. shit doesn't work like that, and if you're doubting that the tax man will-soon-be-or-already-is watching the everyday bankaccounts of every US citizen, you might want to reconsider.

they *KNOW* you made 27k this year, and your job in filing taxes is to 1) Not lie about that shit, and 2) tell them how much you spent on justifiable business expenses, along with receipts for proof. if you fuck up on either of these two little things, you're gonna get fucked in the ass, yet again and this time it's by a big fat government dick. they won't pay you for the sex, and you can't even write off the cost of the next asshole surgery you now need because they ripped you like used kleenex.

so, to answer your question retard OP, stock up on astrolube and profit all you can this year; and don't forget to stock away your pimp uncle sam's cut. there is no "magic threshold" after which you owe taxes, you already owe taxes.
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This is absolute most in-the-closet homo-erotic/phobic thing I've ever read.
 
Isn't the OP asking about tax bands/brackets rather than about avoiding paying?

At the moment, if his only income is as stated, he is in the 8,500 - 34,500 bracket, which means 15% tax in USA in 2011. If he reaches 34,501 his tax will go up to 25%.

Highest income in the low tax band:
15%*34,499 = 5174 so, 34,499 - 5174 = 29,325 net income

Lowest income in the high tax band:
25%*35,501 = 8875 so, 35,501 - 8875 = 26,626 net income

29,325 - 26,626 = 2699 less net income, incurred by earning two dollars more. To avoid this drop in net income at 35,500 he should aim to earn 39,000 to offset the cost of passing the tax bracket.

Don't know shit about tax, but isn't that the way it works? I worked in a factory once where they got an unusually large order and offered overtime to forty people for a number of weeks. Unfortunately they all went into the next tax bracket that year, and most of their overtime pay was wiped out by the extra tax. That was in UK though - maybe USA is different?
 
subigo said:
Even if you only made $4,000 in a year, you still owe about $500 in self-employment taxes alone. Trust me, you want to pay that. People have gone to jail for less than that.

Instead of asking tax questions on WF, you should be reading up on what taxes you actually need to be paying: Self-Employment Tax (Social Security and Medicare Taxes)
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YES! Now we are getuing somewhere. So, the self employment tax is 13%. This was self employment income. I also have a full time job, so this is where I get confused.

Do I pay regular taxes on my income and all that, then figure 13% for the money I made in paypal? Or as Chianti asked, does that effect my tax bracket at all?

One other question. When I have a deduction - Like I hired a consultant for $3,000 and he invoiced me and all. DO I figure deducting this whole amount or a %?

Again, I said I didnt understand this stuff, but I am getting there. Luckily I get to ignore the flaming to get to the good stuff.
 
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