Android Development Income Tax Question

by vistaman » Fri, 21 Jan 2011 04:52:00 GMT


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 Last year, I made about $1200 selling my apps on Market, including ads
income. However, I've also spent about $300 (Android Market fee, a
phone for testing, etc). Can I deduct those expenses, and hence report
$900 for total income? Thanks.

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Re: Android Development Income Tax Question

by jtoolsdev » Fri, 21 Jan 2011 05:09:56 GMT


 I would recommend seeing a tax accountant because these things can get
complicated and not doing the forms right can result in an invitation
from the IRS.




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Re: Android Development Income Tax Question

by Nathan » Fri, 21 Jan 2011 05:16:57 GMT


 This isn't a programming question, and the usual disclaimers apply
about consulting your own tax advisor (which might be TurboTax, I
know).

In general, for US federal taxes, yes - refer to schedule C - business
income and expense.

For state taxes, it is often much more complex, but I'm sure you got
all the right forms when you registered your business with the proper
state agency, right?

Nathan




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Re: Android Development Income Tax Question

by Doug » Fri, 21 Jan 2011 14:47:26 GMT


 Your accountant or even your tax preparer will help you do this
properly if you explain your situation.




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Re: Android Development Income Tax Question

by Zsolt Vasvari » Fri, 21 Jan 2011 15:28:23 GMT


 Does Google send us a W-2?





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Re: Android Development Income Tax Question

by DanH » Fri, 21 Jan 2011 19:59:17 GMT


 I would imagine it depends on what country you're in.

In the US you can deduct those expenses, but you need to fill out some
paperwork -- you can't simply report the $900 and call it done.




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Re: Re: Android Development Income Tax Question

by Justin Giles » Fri, 21 Jan 2011 22:16:16 GMT


 


No.  At least last tax season they didn't.  Don't rely on any ad companies
to do it either.  Basically it's the honor system it appears.  Again, talk
to a professional you trust and always err on the side of caution.

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Re: Android Development Income Tax Question

by niko20 » Sat, 22 Jan 2011 00:11:46 GMT


 This isn't that complicated people, geez everybody acts like it's some
sort of crime or something. Look, if you show you are trying to do it
right the IRS is not going to hammer down your door.

It's pretty simple. Most income will be as a "sole propietor". You
simply add the income to your normal job income if you have one. You
fill out a Schedule C showing business gains/losses. In fact, if you
had less then $5000 in business expenses you don't even need to
itemize them, you can just use a Schedule C EZ form, where you simply
put "income" and "expenses" and then "net profit". Simple as that.

Don't then forget to cacluate the proper taxes. In the US you have to
pay self employment tax, which will be 15.3% of that net profit
amount. To calculate federal tax, you simply add your net profit to
your normal income and then just do your taxes as you normally would.

This isn't rocket science. Just check out the IRS.gov website they
document everything very well there.

-niko






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Re: Android Development Income Tax Question

by DanH » Sat, 22 Jan 2011 00:22:51 GMT


 True -- anyone who's able to read programming manuals should be able
to penetrate the tax instructions sufficiently to handle this.  Just
be aware that there IS paperwork that needs to be done.

And don't count on the money not being reported and try to hide it --
in theory Google and others should be providing you with a 1099, and
they'll send the same info to the government.  If you don't file the
right form the tax man might come knocking.






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Re: Re: Android Development Income Tax Question

by Justin Giles » Sat, 22 Jan 2011 00:36:39 GMT


 


Also, for those who have made any significant amount of income, you should
probably be making quarterly payments throughout the year, or risk
additional fees at the end of the year.

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Re: Re: Android Development Income Tax Question

by TreKing » Sat, 22 Jan 2011 00:39:49 GMT


 




Can you define "significant" for those of us whose eyes glaze over at the
mean mention of doing taxes?

-------------------------------------------------------------------------------------------------
TreKing < http://sites.google.com/site/rezmobileapps/treking> ; - Chicago
transit tracking app for Android-powered devices

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Re: Re: Android Development Income Tax Question

by Justin Giles » Sat, 22 Jan 2011 00:55:13 GMT


 




Here are some guidelines
 http://www.irs.gov/businesses/small/article/0 ,,id=110413,00.html

Basically if after all of your deductions, credits, income, etc. are taken
into account, if you owe more than $1000 (ie: not getting a refund) then you
should have been or should for future years be paying your estimated taxes.
 There are some fines that could go into affect if you owe more than a
certain amount.  I'm not sure what those are though.  I think they are a
percentage of what is owed or something.

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Re: Re: Android Development Income Tax Question

by TreKing » Sat, 22 Jan 2011 01:18:04 GMT


 



Thanks. You know what, I'm going back to TurboTax, going to fill out
everything to the best of my ability, then going to pray.
And if the IRS comes knocking, I'll play stupid. "What are these 'taxes' you
speak of!?"

-------------------------------------------------------------------------------------------------
TreKing < http://sites.google.com/site/rezmobileapps/treking> ; - Chicago
transit tracking app for Android-powered devices

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Re: Android Development Income Tax Question

by niko20 » Sat, 22 Jan 2011 01:24:41 GMT


 Yes, I should be paying quarterly. However they usually let you go the
first year before you get penalized. For now even if I do get
penalties I'll just chalk it up to a learning experience. They aren't
going to toss you in jail or anything after all. As long as you show
you are in good faith trying to meet the requirements they will work
with you. The penalities aren't that high either, so I'm waiting to
see if it's much a deal to worry about it, I think maybe they are 5-8%
of the owed, along with interest earned in how late you didn't pay.

-niko






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Re: Android Development Income Tax Question

by jtoolsdev » Sat, 22 Jan 2011 01:36:33 GMT


 I don't even like to do the tax worksheets my accountant sends me.  So
talk about eyes glazing over.  But the first time I filed back in the
last century as a self-employed person I got audited rather laughingly
by the IRS who told me "use an accountant" because the deductions are
tricky to take.  I have used a tax accountant ever since.  That's why
I recommend at least talking to an accountant so you don't get bit by
not paying quarterlies if you need to.






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-------------------------------------------------------------------------------------------------
TreKing <http://sites.google.com/site/rezmobileapps/treking> - Chicago
transit tracking app for Android-powered devices

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