Thread: Do i have to pay taxes?

I currently run a membership type website where the members pay a monthly fee to remain a member and have access to my content. my website is starting to grow and with the current number of members that i have i make about $500 a month. I get paid via paypal, and I was wondering if i have to taxes on the money that i make, and if it makes any difference i am 17 and live in NJ. Thanks in advance for any help

Yeah... You have to pay taxes on all the profit you make. So take that 500 minus whatever you pay to run your site and that'll give you your taxable income.

how exactly do i pay taxes. its the first time i've gone through this and wouldnt know where to begin.

either hire a bookkeeper or go to an online site like turbotax. either one will put you on the right track

I would take the risk and not pay taxes if I were 17 making $500 a month. Your income probably isn't high enough to require tax filing. Plus if you do file, your age is going to let you reduce so many things you won't pay anything anyway.

Now if you know ahead of time you won't have to pay anything, I think you're supposed to declare anyway. Reduce your site expenses. Reduce any paypal fees you're paying. Get receipts for pencils, pens, and office supplies. If you don't need that, what do you need? Need a new laptop. You need it for business. Go reduce that.

Really, if you're making $500 a month you can reduce everything with frivolous expenses. I guess you're still buying things you might otherwise not purchase, but it's better than getting nothing. Don't buy an ice cream maker or something ridiculous, but basic business expenses won't raise any red flags, and it's not unlikely for someone making a $500 business income to have even a $0 profit.

There are likely billions of dollars lost by taxpayers because they don't reduce eligible expenses. Save receipts for everything now and figure out what to do later if you want.

Great advice! But when your site starts growing i would make sure to keep good "books" and pay on time, don't want the IRS hunting you down!

As has been mentioned, you can use turbo tax online or go to places such as H&R block or Costco usually has some tax guys in there stores during tax season (at least the one by my place does). I'd strongly recommend turbo tax online, its extremely easy and they walk you through step by step.

Since you're self employed, the government trusts you to report your own earnings. With 500$/month your making less than I did at your age working fast food, so i know if you do report your income, you'll pay very little taxes on it. Plus your chances of an audit are basically nil, the IRS have bigger fish to fry.

You'll probably end up owing like a $100-200 for Social Secruity/Medicare per year, thats about it.

Congrats on a makin that much money a month through the internet. Sure beats the hell out of fast food, my friend.

$500 a month is $6,000 a year which I believe is below the filing threshold, assuming you are in the US.

do you still go to school? if you do you dont have to pay taxes on your income.

yeah im going to be a senior this following september, but i have a few friends one who is a caddy who doesnt pay taxes on what he makes and another who works at taco bell who does pay taxes, but that is most likely because it taken out of their check already. the jackal if im not making enough to claim taxes what is the threshold, because at this point $500 is the minimum i can make, but if more members join that will obviously increase. I guess i'll buy turbotax or something just to be sure. I'll probably file taxes just so it looks like i have been paying.