next »

[i wanna be the guy]

I AM REALLY CONFUSED and this has been bothering me more and more lately as the development of my game gets further along

do I need to involve the money made from this game in my ~taxable income~ or does it fall under the category as doing something like going to a neighbor's house and mowing their lawn (where you're essentially being subcontracted or there is no proof that you're actuall making money)?


that's pretty much it, I'm just
really freakin confused about this whole thing and I'm new to this whole thing in general so it's bothering me more than it probably should be

[Booger]

I don't have experience with this so take my word with a grain of salt.

Usually if you're selling via an e-commerce site such as BMT Micro, Plimus, etc., they take care of sales tax.

But you have to report income tax separately.  Most full-timers I know who use e-commerce are VAT registered.

But if you're using a portal such as App store, you are paid in royalties.  So I assume that will be simpler to report, since you don't have to have your site registered as a business.

[RudyTheDev]

Don't take my word for it, as I may not know better, but as far as I know most countries have a minimum self-employed (and even employed) income where you don't have to pay taxes. It should be below the minimum wage mark. So that's why you don't report income for mowing lawns (though you could if you wanted to ).

[Blodyavenger]

Everything has to be reported to the county you reside in. If you don't, it's called a black market and it's not allowed...of course, that is for Slovenia at least.

By rules you should report every single coin you make but hey, since you're not making huuuuge profit, you don't have to care for things like this I guess but it's smart to learn how and where.

[Christian Knudsen]

Everything has to be reported to the county you reside in. If you don't, it's called a black market and it's not allowed...of course, that is for Slovenia at least.

Same thing here in Denmark. You have to file everything as income tax. But there's a tax-free amount you can earn each month, which is deducted before taxes are calculated.

[i wanna be the guy]

Thanks for the replies, guys! Cleared some stuff up for me

[adamredwoods]

Is this for USA taxes? If so, take a look at Schedule C which is for businesses. Don't quote me on this, but there may be a provision that if you fall under a certain amount, you can just claim it as other income.

BUT-- if you make over that amount (US$500?) you have to fill out Schedule C (or C-EZ) and essentially you are a sole proprietor of a business. Online tax software can handle all this and help guide you, too.

[Bishop]

I went a short business course with the Princes Trust (UK charity for young entrepreneurs). There I spoke to a woman from the HMRC and she said that if you sell more than 20 of the same item you're considered a sole trader and need to register as one and fill a self assessment tax return regardless of your revenue and profit every year. Registering as a sole trade will remove your entitlement to Job Seekers Allowance and may effect a few other benefits.

[i wanna be the guy]

Is this for USA taxes? If so, take a look at Schedule C which is for businesses. Don't quote me on this, but there may be a provision that if you fall under a certain amount, you can just claim it as other income.

BUT-- if you make over that amount (US$500?) you have to fill out Schedule C (or C-EZ) and essentially you are a sole proprietor of a business. Online tax software can handle all this and help guide you, too.

Ah, yeah I probably should have mentioned that
USA taxes.
Still, thanks for all the replies.

I do have another question though
Say I was to start a business or a company or whathaveyou - basically just something to call the group that's working on this, that would be treated as a legitimate company - before releasing this game, and treated the game as a product of the business, would I be able to use it for tax cuts (claim rent, list off supplies purchased for home office, etc) to my yearly income as a whole?

[adamredwoods]

would I be able to use it for tax cuts (claim rent, list off supplies purchased for home office, etc) to my yearly income as a whole?

Yup, but there are many rules. You can call yourself a business at any time (it's called an undeclared business or something*) and you can take deductions for it. The best deductions are office space, computer equipment, etc.

Note that you can't just use your bedroom as a place of business and get deductions for it, it needs to be a separate spot dedicated to business only. My office got hijacked into a nursery so I can't use it as a deduction, but it was a separate room where I worked so it could've counted.

The online tax programs (if you pay for premium) go through everything, so it's worth the extra cost.
 
(* p.s. this is why you'll find that some people will "incorporate" themselves as a business on their taxes)

[i wanna be the guy]

would I be able to use it for tax cuts (claim rent, list off supplies purchased for home office, etc) to my yearly income as a whole?

Yup, but there are many rules. You can call yourself a business at any time (it's called an undeclared business or something*) and you can take deductions for it. The best deductions are office space, computer equipment, etc.

Note that you can't just use your bedroom as a place of business and get deductions for it, it needs to be a separate spot dedicated to business only. My office got hijacked into a nursery so I can't use it as a deduction, but it was a separate room where I worked so it could've counted.

The online tax programs (if you pay for premium) go through everything, so it's worth the extra cost.
 
(* p.s. this is why you'll find that some people will "incorporate" themselves as a business on their taxes)

Makes sense, thanks.

[Bishop]

In the UK you can claim £3 a week for using a bedroom as an office.

[Leroy Binks]

Produce the game however you want, but when you are ready to sell make sure you get yourself a FEIN (your business tax id) and register with the state as a business.  Here is a link on how-to from the irs.


http://www.irs.gov/businesses/small/article/0,,id=97860,00.html

[Theophilus]

In the UK you can claim £3 a week for using a bedroom as an office.

NICE