Google AdSense and Taxes

Album Cover: Various Positions

"Her beauty and the moonlight overthrew ya."
Leonard Cohen / Hallelujah

Posted on January 21, 2006 7:39 PM in Miscellaneous
Warning: This blog entry was written two or more years ago. Therefore, it may contain broken links, out-dated or misleading content, or information that is just plain wrong. Please read on with caution.

I'm being a good boy and filing my taxes extra early this year, even though I'm probably not gonna get much out of it. I didn't do any contract work in 2005, though, so I won't be stuck paying a buttload out of pocket like I was for 2004.

While filling out TurboTax tonight, I remembered that because I'm now getting paid by Google as part of the AdSense program (and not for any other reasons), I need to be aware of any tax implications. However, this past year I only received one payment and it was less than $200. So what to do?

I dug around on Google a bit and came across an interesting post on the subject by Russell Beattie. In the post, which is a little dated at this point, Russell begged the question whether a majority of AdSense users would indeed file their earnings from the program. After skimming through the comments on that post, I stumbled upon the following:

Companies are only *required* to send out 1099s when the amount is $600 or greater. So, for $200 in adsense revenue, no I won't pay taxes. For $601.00 in adsense revenue, yes, I'll pay the taxes.

So I'm going to accept that as gospel and do the same.

I intend to make more than $600 in 2006, though (due to a combination of a longer period of time serving ads and the addition of several sites that will get much more traffic than the ones I'm currently serving ads on), so I'll doubtless be revisiting this topic again a year or so from now.

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