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Developer
poornamelessme
Posts: 173
Registered: ‎12-10-2012
My Device: Dev Alpha C

Blackberry Portathons and US taxes

[ Edited ]

This may be a bit of an odd question, and moderators please move this to a more appropriate section if this is the wrong place, but I have a couple of questions regarding the money earned via the portathons and 2013 taxes.

 

I also realize it's a bit too early to worry about taxes, but here in the US we just started the affordable care act stuff, and we sort of need to predict our income for the year ahead of time. I assume we need to declare whatever we made during portathons, but what do we declare it as? Additonal Income? Royalties? Business income (even if we technically aren't a business)?

 

Can we declare any deductions on the money earned, such as if we bought PC equipment, internet, electricity, that sort of thing, for the months the portathons ran?

 

I'm new to this tax thing with Blackberry, so not sure entirely how this works.

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JSanders
Posts: 85,729
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Re: Blackberry Portathons and US taxes

[ Edited ]

If you're in the US, it's taxable income and yes, any business expenses used in running your business are deducted against your income.

 

So if you buy a new PC in this year it's either a biz expense or appreciated across a few years as advised by your accountant. You don't "declare deductions" against specific income. You do on the year in whole. If you're working out of your home, then things like electricity and internet get quite complicated and must be adhered to a very specific percentage of your home vs business...

 

You have an accountant, I hope, if you don't know how to do this on your own.




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Developer
poornamelessme
Posts: 173
Registered: ‎12-10-2012
My Device: Dev Alpha C

Re: Blackberry Portathons and US taxes

[ Edited ]

Thanks for the info. And afraid I don't have an accountant, exactly. My sister is one, and she does my taxes, but she's not really a tax expert type.

 

As for deductions or business expenses ... I purchased a new monitor and printer during this year, so figured I could deduct a percentage for them.  I do some work from home, and deducted a computer a few years ago ... basically just need to sort of guess at what percentage is business related vs home use. I can check with my sister or read up on tax stuff when it comes tax time. I was just trying to get a ballpart figure, for the health insurance stuff. It's weird how they want to know this year's income before the year is even over.

 

Do you know if the portathon income counts as a 'business' or some other form of income? I'm not a business, nor never declared myself as one. How are Blackberry app sales usually counted? Business income? Does Blackberry report to the IRS (probably easier if they do).

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JSanders
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Re: Blackberry Portathons and US taxes

It counts as "income". Portathon, app sales, etc., doesn't matter... it's "income".


The way you file your taxes determines if it is personal income or business income. If you file a busines tax return, it is reported on that. If you don't, and simply file a personal tax return, it is simply counted as income there.

 

As far as expenses, you decide what they are or what percentage they are, estimate very closely and use that.

 

I don't know if BlackBerry reports monies paid to you to the US IRS, I suspect they do if you've ever given them your SSN or federal EIN in your vendor application.




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Developer
Ebscer
Posts: 875
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Re: Blackberry Portathons and US taxes

BlackBerry doesn't actually file any paperwork with the US goverment in terms of the payments that they make to you over the year. (or at least they haven't in years past). As such you don't get a 1099 form, and kindof need to just declare it as "other income".


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Developer
poornamelessme
Posts: 173
Registered: ‎12-10-2012
My Device: Dev Alpha C

Re: Blackberry Portathons and US taxes

Thanks for the replies. If declaring as 'other income'; does that impact whether we can declare business expenses as a deduction? I expect by declaring it as 'other income', all it does it make it a bit more confusing when filling out tax forms, but wanted to doublecheck.

 

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JSanders
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Re: Blackberry Portathons and US taxes

, if you're filing your taxes as an individual, you don't have any "business" expenses.

 

You can always file (if I recall correctly) a Schedule 1120 form with business expenses as an individual.

 

You're way overthinking this. How much did you get from the portathon... $500 or $1,000?

And your apps. If you're making this your main income, you really need to think about how you file your taxes. Ask your sister or have lunch with an accountant or CPA friend just to get clarity on all this.




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jtegen
Posts: 6,541
Registered: ‎10-27-2010
My Device: HTC One, PlayBook, LE Z10, DE Q10

Re: Blackberry Portathons and US taxes

If you are getting "significant" money from development (outside of your day job), and this will be on-going, you should consider forming an LLC. There you can deduct business expenses and only pay taxes on profit (vs. income). Plus, an LLC provides a level of protection against suits. Equipment purchased to run the company can be depreciated over time (e.g. 5 years) and then are an asset of the company. You can take a "draw" from the company as personal income (reported on your personal taxes). Your taxes get a little more complicated, but well worth the liability protection and tax savings (plus deductions).

"Typically" utilities are based on the percent of your home office room size vs. the total area of your home.

A good accountant/CPA can maximize your profits.
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Developer
poornamelessme
Posts: 173
Registered: ‎12-10-2012
My Device: Dev Alpha C

Re: Blackberry Portathons and US taxes

I probably am overthinking this, but just wanted to check on how all of this works before filling out my health insurance stuff, to get it as exact as possible. And yeah, every little deduction, every little category, is supposed to be filled out online when signing up... by Dec. or so.

 

As for money earned, I have no idea how much I'll make in future years, but I made significantly more than $500-$1000 in the portathons. I participated in every portathon, including the Blog one... six in total. So I wasn't really looking at this as how to file in the future as an app developer, simply what category portathons fall under, since it's sort of a weird occurence.

 

But I have a general idea now, at least. Thanks everyone for replies/info.

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