Question about the actual hosting thing.

[Plenoptic]

I asked live support and they answered no to this question but to just make sure I want to ask everyone else to make sure. Do you have to pay income taxes if you make a certain amount of money using while providing web hosting. I don't think you do but I just want to make sure. Or is there any type of fee at all you have to pay other than for the hosting and or domain itself. I know about the paypal and stuff. thanks alot.

[TeeJa]

Not sure what your question is, but:
If your a citizen of the USA, and doing business in the USA, and live in the USA, your running a business and making a profit, and that is called INCOME which the last time I checked, is taxable, and has to be claimed on your Federal & state income tax just like any other business.
I could be wrong here?? But the last time I checked with my account, Income in the USA is taxable, but weather you have to pay any at the end of the year is an accounting judgment.....

[Plenoptic]

how about this, Are we supposed to pay income tax and if so how many of you do?

[David]

This may help (or not). Here goes. I have my own business in that I work as a 1099 contractor (vs. W2 Employee) for a consulting co. as my main employment income. I also have my own business that I run as time permits and take on web related work through that business.

As a 1099 contractor consultant I pay estimated taxes throughout the year (quarterly) to the IRS and the state in which I live. It hurts believe me, but it's better than getting bitten with a HUGE tax liability on 4/15 of the next year. You can go to the IRS Smal Business site for everything you may need to know and more than you probably want to know about tax implications of owning/running a small business. There are ways to determine what your normal tax liability will be. Basically, if you make over $600 in the year I belive, you have to pay taxes on it. Keep this in mind, the IRS doesn't care whether you have a business lic., tax id, etc. if you are on your own, you still have your own business by virtue of being self-employed. You are responsible for paying taxes to the IRS and most likely to the state in which you live for any income derived from your business (whatever it may be).

You may have been thinking about SALES tax. That is not required for hosting businesses because it's a service that is being provided and no goods are being sold.

If you still have questions, I'd consider talking with a CPA to get them answered. It will most likely be worth it in the long run. Good luck!

David

[Plenoptic]

Now I am getting really confused. I probably shouldn't even be learning about this stuff yet considering I am going into High School next year. Half the people I have talked to said I don't have to pay income taxes, and the other half have been saying you do have to pay income taxes if you are selling web hosting to people. I don't get it. How about this. How many of you pay income taxes for your web hosting and only your web hosting business.

[TeeJa]

Your best bet is to consult with an account. Or study up on the US & your states tax code.
You might be getting mis-information about not paying/filing taxes because your ISP can not charge you a tax on ACCESSING the Internet. Other than that, if you make an income from the Internet, and over X amount of money, your government wants to know. Whether you file and claim it or how you keep your accounting books is your business. But you should be aware of the Tax laws, as it will affect you through out life. No one here can legally give you advise, or should they.

[circpros]

Or you could look at these sites to find a little insight to see what income is in reality, taxable.

http://www.taxableincome.net/

http://www.861.info/

The guy hasn't paid taxes since 1997, and has been running full page ads since then daring the IRS to prosecute him. I've read his legal reasoning, and it seemd very solid, but the true test is coming up soon. He finally convinced the IRS to prosecute him, after 8 years of being a fly buzzing around their faces. The trial starts early in July, and believe it or not, the guy is looking forward to it.

_________________________________
I am not rendering tax advice. Just thought the concepts presented here were novel and compelling, and I'm saying my prayers that it passes legal muster. Many times, things that make logical sense don't pass the legal hurdle..... but I'd sure like to keep more of the money I work for!