Hey everyone, as I said in the title, it’s a new year and that means we have until April 15th to file a tax return. As this is my first year on AudioJungle, I have never reported my AJ income before. So I want to ask American authors how you guys have repotted AJ incomer before.
I will take a wild guess and assume that we don’t get a 1099 from Envato.
Thanks for all the help.
As far as I know, you have to earn $600.00 per year or more to get a 1099 form. If less than that amount, it’s up to you to claim that income. If you do not receive a 1099 form, it will not be reported to anyone for tax purposes. Just food for thought…..
Americans do not get a 1099 from AJ. I am not a tax expert but I just claim it as additional income and file accordingly.
Yep, I believe the 600.00 amount is the threshold for requiring a 1099. But like Tim says it’s also true that you won’t get a 1099 from AJ for any amount if you live in the US. I get 1099s from some other US based marketplaces but not from here.
My first year for which I reported stock income (2009) I just reported the amount as hobby income on my 1040, but in subsequent years I reported it in the income section on Schedule C. If you use one of the tax software programs (H&R Block or Intuit) they can help guide you through either entering 1099s or reporting other income amounts.
I am not a tax expert either, so don’t take anything I say regarding reporting the income as gospel. I just do what my tax software tells me to do
Thanks for the info- basically what I was thinking. Schedule C’s seem to be what’s necessary for my income level. I use TurboTax, and I’m sure it’ll walk me through what I need…
Whats the point to report your overseas income? i guess if you do not make a lot they will give you some tax refund back but if you do they will charge the hell out of you but there are some good points about filing taxes – if you buy some equipment like Recording stuff and you claim it as work items they can actually refund you if you have a proof of purchase. But if you did not make more than 500$ it is considered as hobby and therefore u do not have to even file it. Anyway i aint a tax expert my self but that’s what i have heard and i use Turbo tax too
Legally you should report all your income, even if it wasn’t reported to the IRS via a 1099, otherwise it’s technically tax fraud in the US. Although you may be able to get away with not reporting it, it’s not a good idea to mess with the IRS. They could come back at you years later for the back taxes with interest
I hadn’t heard about that $500 threshold for reporting income – I’m pretty sure that you are required to report all income, even if it’s just $10.
You can deduct expenses toward your hobby if you’re reporting the amount as hobby income, but it’s subject to a 2% floor of your total income, and also you can’t deduct more than you made. So if your day job makes 48,500 per year, you made 1500 in hobby income and spent 1200 on recording equipment, you could only deduct 200 in expenses (because you can’t deduct the first 2% of the 50000 you made, which comes out to 1000).
Thank you guys for all of this great information!
I am bumping this thread because I am wondering what percentage of your earnings that you put away for tax purposes? I know a lot of people don’t do that and then end up with a huge bill come tax time
Any recommendations? 20%? 25%?