PAYPAL TAX question

S

Spektor

Guest
I made under 400 dollars doing a hobby which is making beats about 370.00


I earned that
income through PAYPAL...will paypal draw me up a TAX FORM SO THAT i CAN REPORT IT?

If it doesnt, can I use the paypal statements to report to my income earned to my advisor during tax time?


Me making beats actually isnt a business its just a hobby.....that i wanna make a little income doing....
 
If you have a business account through pay pal then the answer is yes. They used to send them out but this year it is only electronic. I guess to save money.

When you first log into pay pal look at the top area right next to the button that allows you to withdraw your money to your bank account. To the right is a tab that says history and the forth one down is your tax documents for the year. Just choose your year from the drop down box and print. If you don't see a tax statement then chances are they don't have your tax id number on file and then you will need to use your statements.
 
Yeah my job you can get your W-2 through faster online than wait for them to send it in the mail..
but I had a partime job and I had to used unemployment insurance so I got to wait for the State Labor Department to send my tax info too
 
Mine is a personal account...not business account...i dont plan to make over 500 each year.........

Will it be a bad thing I report this income?
 
Well you can do what you want, but legally if you are running your own business in the U.S. and are self employed then you have to file quarterly an estimated tax and file annually. The amount is $400 BTW. If you make over $400 for the year then you have to file and even in some situations even if it is under $400 you still have to file. I would head over to the IRS site and go through their FAQ's. If you have enough deducts you shouldn't be paying anyway so it is no big deal to file. Are you not writing off your business expenses this year? Anyway, like I said, it is your call but I would not do anything that will come back to bite you in the you know where.

FYI You should be filing a schedule C and not a W-2 unless you are an employee. It really depends on how your business is set up as to what file you use. I am not an accountant so I can tell you with 100% certain which file you need to use, but if you get a decent software business program it will do it all for you and take away your headaches, that is what I did.
 
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Im actually emplyed part time WHICH IS MY ACUTAL JOB....but I did this to see if i could bring in more income.......

So im a EMPLOYEE at a regular job.....

I dont have any business expenses...I just have a PC......and make beats on FL Studio........

The blog was FREE......everything was free.....I didnt put any money into it.......

---------- Post added at 11:14 AM ---------- Previous post was at 11:10 AM ----------

i looked over it actually i made 280.00 like i said I have an actuall job and this is just a hobby
 
HIMbeats said:
Well you can do what you want, but legally if you are running your own business in the U.S. and are self employed then you have to file quarterly an estimated tax and file annually. The amount is $400 BTW. If you make over $400 for the year then you have to file and even in some situations even if it is under $400 you still have to file. I would head over to the IRS site and go through their FAQ's. If you have enough deducts you shouldn't be paying anyway so it is no big deal to file. Are you not writing off your business expenses this year? Anyway, like I said, it is your call but I would not do anything that will come back to bite you in the you know where.

FYI You should be filing a schedule C and not a W-2 unless you are an employee. It really depends on how your business is set up as to what file you use. I am not an accountant so I can tell you with 100% certain which file you need to use, but if you get a decent software business program it will do it all for you and take away your headaches, that is what I did.
Click to expand...

hey what software do you use...post here or shot my a pm thanks man...looking for some software to help with the books and then hire a CPA to look over my stuff every quarter
 
Spektor said:
Im actually emplyed part time WHICH IS MY ACUTAL JOB....but I did this to see if i could bring in more income.......

So im a EMPLOYEE at a regular job.....

I dont have any business expenses...I just have a PC......and make beats on FL Studio........

The blog was FREE......everything was free.....I didnt put any money into it.......

---------- Post added at 11:14 AM ---------- Previous post was at 11:10 AM ----------

i looked over it actually i made 280.00 like i said I have an actuall job and this is just a hobby
Click to expand...

Ok, I think I have a clearer picture now. Your original post says that you made 370 dollars last year from music which was paid to you through PayPal. Your question was will they send you a statement or so that you can report this income on your taxes. It appears this was NOT your question, but instead it really was do I have to claim this money as part of my personal income because I don't have a business yet? Correct me if I am wrong but it sounds like to me that you want to know if there is way that you can NOT claim this money and not get into any trouble but because you are only doing this as a hobby at this point you don't see the point. Hmmm I think I will stay away from answering this question.

---------- Post added at 04:42 PM ---------- Previous post was at 04:34 PM ----------
fataltone said:
hey what software do you use...post here or shot my a pm thanks man...looking for some software to help with the books and then hire a CPA to look over my stuff every quarter
Click to expand...

I have only ever used 2 in 10 years. Quickbook & Peachtree. Yes they are both like 200 dollars, but the headache of every small business, contractor, painter, janitor, promoter, producer or engineers is all the same. DOING THE BOOKS! Everyone hates it and it is time consuming. Most people don't invest in a decent system from jump and it isn't until things start going good and several late nights that they say, "oh I better get accounting software." It is silly to me. Don't people expect their business to grow? Don't they expect to blow up? If not....what is the point. Anyway, I like em both....I am back to Quickbooks because I am doing the books on the wifes mac and Peachtree is windows only.
 
I have only ever used 2 in 10 years. Quickbook & Peachtree. Yes they are both like 200 dollars said:
okay I'm knew about Quickbooks and you said you like them both so it's more about preference than features right ..both do the exact same thing?
I took three accounting classes so I know accounting no where near a CPA though lol...

so I'm looking for ease and something I can customize as well
I did some accounting for my church but everything was set up already
Click to expand...
 
exactly@HIMbeats....I juss decided to report anyway......

---------- Post added at 09:01 PM ---------- Previous post was at 09:00 PM ----------

becuase it can be trailed
 
Spektor said:
exactly@HIMbeats....I juss decided to report anyway......

---------- Post added at 09:01 PM ---------- Previous post was at 09:00 PM ----------

becuase it can be trailed
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Yeah I wasn't really sure if that is what it was and I didn't want to sway you one way or another, plus you never know who reads these post..lol. irs gets around. Hey, but some advice man.....if you keep doing well and decide to make it a biz above board make sure you do an LLC or a partnership. This way you can collect a salary from the business and all the monies don't go to your personal income at the end of the year. This will help you grow the business and help you set up an budget, etc.

I am not the business expert around here.....that would be producerJC and fataltone, but I have been at this for more than a minute so I learned a lot by trial and error..lol..but you are more then welcome to hit me up if you have a question on something as you get going.

Big props for making some money in this biz man because a lot kats just talk and year after year never advance and never make anything. Not that money is everything, but it is nice to make some money doing something that you love. Once you start doing it you will wonder why you waited so long in the first place..lol. Much success to year in 2012!
 
HIMbeats said:
Yeah I wasn't really sure if that is what it was and I didn't want to sway you one way or another, plus you never know who reads these post..lol. irs gets around. Hey, but some advice man.....if you keep doing well and decide to make it a biz above board make sure you do an LLC or a partnership. This way you can collect a salary from the business and all the monies don't go to your personal income at the end of the year. This will help you grow the business and help you set up an budget, etc.

I am not the business expert around here.....that would be producerJC and fataltone, but I have been at this for more than a minute so I learned a lot by trial and error..lol..but you are more then welcome to hit me up if you have a question on something as you get going.

Big props for making some money in this biz man because a lot kats just talk and year after year never advance and never make anything. Not that money is everything, but it is nice to make some money doing something that you love. Once you start doing it you will wonder why you waited so long in the first place..lol. Much success to year in 2012!
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LLC is the way to go and your first year you're going to get all kind of tax relief and credits...so take advantage of that first year you set up you business there are tons of articles on this or watch a youtube video on it.. and you run your business out of your home tons more credits
read this blog article from my site on settting up you business in four steps
 
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Man all i have towards setting up my business is an EIN!! :( Hopefully BMT 101 (business 101) will help me this semester haha. checking your blog now tone
 
fataltone said:
okay I'm knew about Quickbooks and you said you like them both so it's more about preference than features right ..both do the exact same thing?
I took three accounting classes so I know accounting no where near a CPA though lol...

so I'm looking for ease and something I can customize as well
I did some accounting for my church but everything was set up already
Click to expand...

You know more about accounting then me it sounds like...I am no accountant..lol..but both these two softwares are really easy to use. Here is a recent review in compare so you can check the features. They have Peachtree at #1 and Quickbooks at #2 so I guess you can't go wrong with either.....

Accounting Software Review 2012 | Best Bookkeeping Software | Small Business Accounting Software - TopTenREVIEWS
 
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BeatitudeMusic said:
i would get this checked through by a lawyer.
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What exactly does he need a lawyer for? Are you suggesting that he find a tax lawyer at $150 an hour to help him decide what to do on a $280 matter? That seems asinine to me just looking at the simple math. I am not sure how things work in the UK for you, but in the states the law is pretty clear. Almost everything that you make is taxable income to them. Since he does not have a business license then it would fall under the category of personal income. Now he can choose to claim it or not claim it, but the law is pretty clear on this subject. A simple search on the IRS website would suffice. Keep in mind that where the money came from is not as important than the fact that you must claim it. Remember Al Capone got caught for not paying taxes not because the money was made from illegal activities.
 
correct himbeats now I will be checking with a CPA that I'm building a relationship with every quarter on my tax and accounting system just to make sure things are correct because since I wear some many hats in my company things can slip through
so important thing is to build real-world relationships with ppl of importance to your company
 
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