Pay those taxes kids!
While doing some reading on Second Life business and taxes i came across several articles from last 2006 mentioning that the IRS was trying to get access to paypal user's history due to many many online businesses using paypal and not paying taxes. Well, since I know several people on my friends list that either run businesses through paypal or transfer their second life earnings using paypal, i thought i would let you know that they IRS has, finally, gotten permission to search anyone's account history in order to find tax evaders.
"A federal court has granted the Internal Revenue Service permission to search PayPal members' offshore bank accounts and credit card records to identify possible tax evaders."
So, yeah.. i guess it could be sticky. I don't know what they plan to do for people if they start declaring their earnings now but have several years of undeclared earnings.
So how do you know if you make enough on paypal or other means to be required to file those earnings? Well i checked that:
"a married couple under age 65 generally is not required to file until their joint income reaches $16,900. However self-employed individuals generally must file a tax return if their net income from self employment exceeds $400."
Second life IS considered self employment. and obviously internet businesses and ebay businesses do as well. so i am definitely not taking any chances.
"A federal court has granted the Internal Revenue Service permission to search PayPal members' offshore bank accounts and credit card records to identify possible tax evaders."
So, yeah.. i guess it could be sticky. I don't know what they plan to do for people if they start declaring their earnings now but have several years of undeclared earnings.
So how do you know if you make enough on paypal or other means to be required to file those earnings? Well i checked that:
"a married couple under age 65 generally is not required to file until their joint income reaches $16,900. However self-employed individuals generally must file a tax return if their net income from self employment exceeds $400."
Second life IS considered self employment. and obviously internet businesses and ebay businesses do as well. so i am definitely not taking any chances.