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Understanding Taxes for Self-Employed YouTubers

Discussion in 'YouTube Networks, Monetization and Partnerships' started by Kleineganz, Jan 17, 2014.

  1. Kleineganz
    Opinionated Vlogger and Gamer
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    Sweden has even higher income taxes than the US. Most European countries do, in order to fund all their social services. It's the standard tax the rich to give to the poor mentality.
     
  2. Uncivilized Elk
    I Love YTtalk
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    I like how the one person who basically said "But PDP still makes a ****ton of money even after taxes" many pages back got a reply of "That's not relevant, move it elsewhere" but you guys keep willfully discussing how "unfair" the taxation system is when it's just as irrelevant to the topic, haha.
    If you make a ton of money, a lot of it will be taxed - that's life in practically every established society that burns through tons of natural resources and has complex infrastructure. I'm not going to be weeping for somebody who can still afford multiple houses after taxes when others can barely afford to rent a home, and it can easily be argued many people from these two categories work equally "hard". Not to mention, while I'm no expert on being old, I'm pretty darn sure the social security portion you have to pay ends up coming back to you when you find yourself decrepit, so really that portion is like a pseudo-investment.


    Seriously though, my main point to reviving this thread was to say your initial post is great and super helpful. But since I skimmed most of the thread and a ton of the discussion has simply been on the "ugh, why taxes!" topic I had to give my 2 cents.

    One thing I would recommend for this thread though is more prominence placed on estimated taxes since you have to file those quarterly in the US if you make money off something like YT. And I believe there's actually a penalty if you miss those, right? Only reason I even found this thread was because I was reading up on taxes for 2016 (long ways away, but I am procrastinating from something else) and for the first time I learned about needing to file estimated taxes - glad I read about that before the first quarter is due!



    I do have 1 question though! Is there a benefit to registering as a business when doing YT other than the liability stuff?
    Does filing as an individual vs. a business actually effect your taxes in any way or not?
     
    #152 Uncivilized Elk, Jan 24, 2016
    Last edited: Jan 24, 2016
  3. Kleineganz
    Opinionated Vlogger and Gamer
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    So that really depends on your revenue. When you first start out, you would register an LLC for liability purposes. It doesn't give you a tax benefit, but it's good to establish a business presence, build business credit, etc. Then once you start earning some really solid income (starting around $50,000-$100,000/year), restructuring as an S-Corp and setting yourself up as a employee, you can start to take some tax relief by paying yourself part of your revenue as your salary, and the rest taken as a distribution. You pay less tax on your distribution (only income tax, no payroll tax). I recently did that with my consulting business and it's made a difference.
     
  4. WeiseGamer
    Your #1 Source For Indie Gaming
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    So is OP still good for 2015/2016 now?

    This may be the first year I make over $600 total between YouTube, Twitch, etc. under my sole proprietor Tax ID I created in 2014. I haven't filed taxes under that ID for 2014 and wont for 2015 as I didn't earn anything really (way under $600).

    I am saving everything that would be considered tax write-off like Steam Game purchases and equipment for my channel, as well as any paid work like video editing or graphics. If I make like $650 off YouTube/Twitch, stuff that would be considered self-employed, can I put it under my tax ID for WeiseGamer and use those write-offs?

    Also how do you form a LLC?
     
  5. Kleineganz
    Opinionated Vlogger and Gamer
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    1. Check online for the current us federal marginal tax rates (I'd paste a link, but I ran out of cash and lost my VIP status, sorry).
      • You will have to look up the state tax rates in your area on your own.
    2. While you do have to start claiming your self-employment income this year because of your earnings, it won't be enough to make any significant impact on your taxes.
    3. Yes you should be able to write off at least part of your expenses for making videos, even if they total more than what you earned (therefore resulting in a "loss"). However if you are employed in any other way, that may complicate things and at that point I'd recommend consulting with a CPA (certified public accountant).
    4. I used Legal Zoom to form my LLC back in 2008.
     
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  6. WeiseGamer
    Your #1 Source For Indie Gaming
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    Thanks!

    As for 3), I do not hold you liable in any way shape or form for your reply previously, current, or in the future, but what complications may come up? I work full time in a day job for about $40k a year.
     
  7. Kleineganz
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    Well it can get complicated in terms of how much/what you can expense, especially if your side business earns so little. The IRS may see it as suspicious and try to audit you, so you'd need to know what may or may not be seen as a red flag.
     
    WeiseGamer likes this.
  8. just Moto
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    Would someone have a sample profit and loss statement for running a YT Channel they could share?

    Thanks
     
  9. Kleineganz
    Opinionated Vlogger and Gamer
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    I don't have a YouTube specific profit & loss statement (I only earn about $400/year from my 3 channels combined), but I do have one for my small business if you'd like to see what one looks like. Send me a private message if you'd like to see it.
     
  10. blackomen52
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    I live in Croatia and in Croatian AdSense Terms it states that the income that I receive from Google is not taxable. I guess I'm good then :D
     

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