The topic no one talks about: Tax Time


#1

Disclaimer: Any information shared by anyone who posts here will be purely regarded as informal advice and things to think about, and not as legal advice. In no way do I hold anyone else responsible for my own choices or actions. I’m simply seeking advice on a subject I’m not familiar with.

I’m not living in a van yet. I don’t even have a van yet. (Goal Date: Sept 1, '19.) I’m in the process of trying to figure out how to make a living for myself online, preferably using multiple streams of income. But, I have questions about how this works come tax time.

As an EXAMPLE only, I’ll use YouTube van life channels. They make money off of their videos (in a few different ways, I’m sure), sell merchandise, have Patreon subscribers, and do other online things from working temporary/seasonal jobs, writing, videography, being secret shoppers and filling out surveys for cash.

My questions are:

  1. How on earth does all of that work out come tax time?
  2. How can I learn the best way to set myself up tax-wise BEFORE I start making money online?

I don’t want to create a mess even before I’ve started. How do I set myself up in the best possible way when it comes to creating my own income streams and dealing with the tax man properly?


#2

Greetings!

I just keep track of my income, and my business related expenses with receipts, then take them to a tax man and done. For ~$100 they do all the paperwork and fill out all the forms, and that’s well worth the ~$100 to me.

Cheers!


"Smiles are contagious, pass them on!" ~ Van_Dweller




#3

I’m sure that’s what I’ll end up doing, too. I’ve always done my own taxes but they’ve always been simple and straight forward.

Working for yourself and making an income online, do you recommend incorporating or becoming an LLC? Would there be any tax benefits to doing so?

I need to learn what I’m responsible for paying into. Social security, etc., How much and how often should they be paid and how much to set aside to make sure you have enough to pay.

Income tax purposes are one reason I’ve decided to set up residency in South Dakota somehow. Not having any family, I don’t have the luxury of using anyone’s address. The only two friends I have here (having been a hermit for so long) are in apartments so that’s not feasible. Not to mention one of my friends is 93!


#4

Greetings!

I don’t, I’m just an unknown individual. My tax man knows how much to pay Social Security, and takes care of that too.

Cheers!


"Be the reason someone smiles today!" ~ Van_Dweller



#5

How often do you pay your taxes and social security? Quarterly? Annually? When your income comes in, do you set aside a certain percentage to be sure you always have it to pay?

The perfectionist in me really comes out when I learn new things! I’m just a firm believer in covering my butt and all the bases!


#6

Greetings!

I just do mine annually, which was one reason I chose to not be an official business, because that would have required me to do it quarterly.

So my tax man tells me what I owe in taxes and social security, and I just pay it to him and he takes care of everything. I just take it out of savings, it usually averages 35%-40% of my gross income, for everything including social security. I budget for 50% just to make sure I always have enough, then any extra goes into my emergency fund.

Cheers!


"Be the reason someone smiles today!" ~ Van_Dweller



#7

I had no idea that this was an option! It’s the very best one for what I want! How do you list yourself as self-employed and not have a business name though? What do you register as your “Job Description”?

And taking that 50% off the gross for taxes and emergency fund is so, so, so smart! I will be following your example on this. Paying in once a year gives your money more time to work for you, too, depending on where you put that first 50%.


#8

Greetings!

I just list it as self employed and leave it as that.

Cheers!


"Be the reason someone smiles today!" ~ Van_Dweller



#9

If you don’t get a W2 or a 1099 from someone, then you’ll be dealing with just the state your a resident of and the feds.
I’ve no idea how youtube or blogs work in terms of paying you but I know that you’ll owe 15% for social security to the feds (self employed tax). That is off the top… then comes the regular income tax.


#10

Thanks, @becida

Regarding YouTube, I read the following:

Being a YouTube makes you self-employed. That’s why you had to fill out and sign a W9 form (either for AdSense or your network). If you earn more than $600 in a given year, then you should be receiving what’s called a 1099-Misc in the mail. This details all your income (and has been reported to the IRS and therefore you can’t get around paying your taxes on it).
Not being someone who wants to dodge paying taxes, I don’t want to pay more than I have to either, so I think I’ll take the advice of @Van_Dweller and, until I can talk to a tax expert, I’m going to put 50% of everything I earn being self-employed aside. Whatever isn’t needed for taxes will definitely be great for the emergency fund!

Thanks again, becida!