I started this online programming/engineering work, where people put up their demands, you do their work, and then they pay you, for example C++, VB.NET, database, DSP related work. I just started it as a part time thing in my last semester, but I made around $2500 last month. If I continue at the same pace, I might make even more as ppl pay more once the feedback goes up. But I dont really intend to. Payment was made via paypal to me. I was wondering if this would be taxable or not?
Also, alot of people paid via money orders
The income is taxable..dont know too many people who report all of their side ventures.
P.S. is this elance?
From a strict legal standpoint, this is taxable income. However, you don’t have to pay income tax if your total gross income for the year is below $10,050. If you have other sources of income (scholarships, fellowships, TA’ship etc), and you have got taxes deducted, you may have to file a tax return in any case, (to get a refund, in most cases)
Anyway, for more information read the IRS publication 17, available online
Go to page 8 for individual limits.
ps. All the info relates to 2003, by the way.
from a strictly illegal viewpoint, unless its a lot and all, who would even know. unless faisal sends Elliot Ness after u
Bhai, this is a public forum. What else do you expect me to advise him? Tax-chori table ke neechay say hoti hai... khulam khula nahi.
Yeah, its way above 10k so I guess I have to pay it.
Faisal bhai, I dont intend to keep what belongs to the Govt, I was just making sure whether its taxable or not.
Thanks for the tips!
In the UK the nil rate tax bands are different for an individual's income tax and the corporation tax of a small business. Check the two band rates and if it works out that ur income is higher than the income tax nil rate band but below the corporation tax nil rate band then register ur activity as a company. It'll save u some money and you can always put your family members as employees to take out more money from profits.
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Originally posted by Faisal: *
From a strict legal standpoint, this is taxable income. However, **you don't have to pay income tax* if your total gross income for the year is below $10,050. If you have other sources of income (scholarships, fellowships, TA'ship etc), and you have got taxes deducted, you may have to file a tax return in any case, (to get a refund, in most cases)
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You don't have to file an income tax return because your personal and basic deduction comes out to about that amount (don't know the exact number so I'd assume Faisal is right).
You always have to pay income tax :)
Ofcourse if you have had tax withheld and your income is below tax level you should file or you won't get that money back.