AdSense taxes question

The Big Three · #1 (**permalink**) 12-24-2008, 04:12 PM

I'm creating a website with my friend, and we're both high schoolers (15 and 17 years). When we get AdSense, will we have to sign up with our parents' information?

I'm a little wary of using AdSense; I want to make a bit of money on our forum but I'm concerned about the information we'll need to give out and how much money it'll cost for taxes.

lisa · #2 (**permalink**) 12-24-2008, 05:48 PM

You would just report anything you earn as extra income on your tax form and if you make over a certain amount (I believe it's $4,000) then you can claim expenses (website fees, etc.) on a Schedule C small business form. So how much you earn determines how to report it and if you can write off anything. It's really best to consult with a local tax professional to get specific advice. But you DO have to report what you earn.

James · #3 (**permalink**) 12-24-2008, 10:47 PM

I don't know if you have to sign up in your parents name or not. Check it out with google. Someone else may know. But I do know that if you do and the money is assigned by google to your parent's income, that parent will have to pay and at their income tax rate.

Like any other business, google has to file their tax records showing who they paid (for them it is one of their expenses). And these things are all computerized, so while there may be some things the IRS may not discover, if you (or your parents) fail to report income on income tied to their social security number, it is only a matter of a year or two before they will receive a letter from the IRS with a bill for unpaid taxes (with late fees and interest).

Even if you file and pay yourself, if google reports referencing their social security number it will take time to straighten it out. So just watch what you are doing. Get it set up in your name if you can, unless you are making a lot of money and pay at a higher rate than your parents.

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