do I need to pay tax for my commision?

D

dogshead

New member
Apr 15, 2010
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dont laugh at me since I have not earned my first buck yet. :food-smiley-010:when I signed into CJ, it told me i had to provide my SSN before it can pay me. does this mean I have to pay tax for all I earn? for example, if my total income is 100USD and tax rate is 20%,CJ will pay 20USD to Sam Uncle and give me remaining 80USD? have you all paid tax for your commission ?
:repuke::repuke::repuke:
 


You DO pay tax, but CJ won't deduct it. It is your responsibility to pay it up during tax time.

Here's how it works:

dogshead gets $105 from CJ.
dogshead buys a $100 lapdance to keep himself motivated to make more campaigns
Tax season arrives
dogshead now owes: $105 income minus 30% (different for different states/situations) of $100 expenses = $75 taxable income.

So you pay 20% tax on the $75.
 
juntao65 said:
dogshead buys a $100 lapdance to keep himself motivated to make more campaigns
Tax season arrives
dogshead now owes: $105 income minus 30% (different for different states/situations) of $100 expenses = $75 taxable income.

So you pay 20% tax on the $75.
Click to expand...

I don't know where you get the 30% of expenses being deductible 100% of expenses are deductible (except food as part of a business trip which is 50%). In the above example OP needs to pay taxes on $5 assuming the lap dance was a valid deduction which it is not.

OP would pay 15% self employment tax (ss/medicare) and then whatever his tax rate is on top of that (~7.5% of the SE tax above is deductible). Generally it is a good idea to save ~25% of your self employment income for taxes. If you don't make much you can get away with 20% but anything less than that and you are likely to get hit with a big bill come tax time.

Tax rates
2009 Tax Rate Schedules: Marginal Ordinary Income Tax Rates for 2009

OP if you are making significant amounts of money you should pay quarterly taxes in order to avoid getting a 10% under payment penalty.
 
Yeah sorry had the wrong wording but it's still 50% for meals/entertainment at least in the US.
 
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