Tax season questions

stera8

macrumors member
Original poster
Aug 21, 2014
59
2
Hello everyone. I always use turbo tax and I'm trying to figure out which version to purchase this year.

I began developing in September and have made about $25 from iad revenue.

Through ad mob it has been less than a dollar. Even though it's a little amount, any tax recommendations? Do I get the turbo tax home and business?
 

Meister

Suspended
Oct 10, 2013
5,455
4,265
I'd recommend to save time and $$$ and get a tax lawyer to do them for you.
 

chown33

Moderator
Staff member
Aug 9, 2009
8,356
4,332
Gourd City
What was the total income received from app development?

What were the total expenses for app development?

Is this the first year you've had income from app development?


If you paid more (e.g. $99 fee) than you made in income (e.g. $26) then you don't really have a "business". You have a hobby. That's not an insult, it's what the IRS considers something you spend money on that doesn't yield a net profit (income > outlay). You don't need a "business" tax-prep pkg to fill out the "hobby expenses and income" section of a tax form (assuming you have enough expenses to even itemize deductions).

On the other hand, if you filed last year as a sole proprietorship because you had income from apps, then you should probably do the same this year. However, if your expenses exceed your income, and it's the same last year, you'll be in at least your second year of business losses. I forget the specifics, but you need to show a profit in N out of M years to file as a business with net losses (I don't recall what N and M are, but any real tax advisor would know).

If you're still not sure, then consult a competent tax advisor. You might be able to get a useful answer by calling the IRS itself. They have a website and an 800 number, as I recall.
 

stera8

macrumors member
Original poster
Aug 21, 2014
59
2
What was the total income received from app development?

I signed up in August. I made about $10-$15 through iAd and 30 cents from Ad Mob

What were the total expenses for app development?

Besides the $100, I purchased a few graphics for probably about $30 and I took a couple Udemy courses for about $60

Is this the first year you've had income from app development?

Yes


If you paid more (e.g. $99 fee) than you made in income (e.g. $26) then you don't really have a "business". You have a hobby. That's not an insult, it's what the IRS considers something you spend money on that doesn't yield a net profit (income > outlay). You don't need a "business" tax-prep pkg to fill out the "hobby expenses and income" section of a tax form (assuming you have enough expenses to even itemize deductions).

On the other hand, if you filed last year as a sole proprietorship because you had income from apps, then you should probably do the same this year. However, if your expenses exceed your income, and it's the same last year, you'll be in at least your second year of business losses. I forget the specifics, but you need to show a profit in N out of M years to file as a business with net losses (I don't recall what N and M are, but any real tax advisor would know).

If you're still not sure, then consult a competent tax advisor. You might be able to get a useful answer by calling the IRS itself. They have a website and an 800 number, as I recall.
No offense taken to the hobby remark because a school teacher is my job and app development has become a hobby. If I make money, AWESOME! :p...if not..oh well. I could be having way more expensive hobbies haha

I appreciate the advice and thoughtful post. Thanks for mentioning the IRS... I didn't realize I could ask them this.
 

Meister

Suspended
Oct 10, 2013
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A tax lawyer for $25 in revenue? You aren't a tax lawyer are you.. ;)
I misread your post.
I thought you meant some tax app that costs $25, but now I am really lost. :confused:
Who hands in a tax report for $25 revenue?
 

stera8

macrumors member
Original poster
Aug 21, 2014
59
2
I misread your post.
I thought you meant some tax app that costs $25, but now I am really lost. :confused:
Who hands in a tax report for $25 revenue?
Wasn't sure if I needed to since it is just a small hobby and not a business :p
 

AppSwage

macrumors newbie
Jan 18, 2015
29
0
Wasn't sure if I needed to since it is just a small hobby and not a business :p
The question actually isn't a matter of "hobby" or "business". Revenue is revenue regardless of whether you consider it a real business or not. That said given the amount and the fact, as mentioned by another poster, that you are operating at a loss ($25 being less than the developer fee) and I don't see a need or reason to report it. I'm not an accountant though.
 

Meister

Suspended
Oct 10, 2013
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The question actually isn't a matter of "hobby" or "business". Revenue is revenue regardless of whether you consider it a real business or not. That said given the amount and the fact, as mentioned by another poster, that you are operating at a loss ($25 being less than the developer fee) and I don't see a need or reason to report it. I'm not an accountant though.
If the OPs annual income amounts to 25$ then he either lives in the mighty republic of somalia or in a cardboard box.

If the $25 are an additional income to his other sources of income, it depend on his overall tax status and that's where a tax lawyer comes in handy.
It depends on various factors, like juristiction and citizenship. There is 0 information in the OP.
 

AppSwage

macrumors newbie
Jan 18, 2015
29
0
If the OPs annual income amounts to 25$ then he either lives in the mighty republic of somalia or in a cardboard box.

If the $25 are an additional income to his other sources of income, it depend on his overall tax status and that's where a tax lawyer comes in handy.
It depends on various factors, like juristiction and citizenship. There is 0 information in the OP.
Certainly true and only he can answer. That said and he called it a "small hobby". My assumption is that the $25 is not the sum total of his income but rather what he has made from apps/ads. He is preparing for his regular taxes and was wondering what he needed to do with this additional $25. That was my takeaway but of course only the OP can answer as to his actual intention.
 

stera8

macrumors member
Original poster
Aug 21, 2014
59
2
If the OPs annual income amounts to 25$ then he either lives in the mighty republic of somalia or in a cardboard box.

If the $25 are an additional income to his other sources of income, it depend on his overall tax status and that's where a tax lawyer comes in handy.
It depends on various factors, like juristiction and citizenship. There is 0 information in the OP.
Nah...no cardboard box here. However, as you read the thread.. I elaborated.

Certainly true and only he can answer. That said and he called it a "small hobby". My assumption is that the $25 is not the sum total of his income but rather what he has made from apps/ads. He is preparing for his regular taxes and was wondering what he needed to do with this additional $25. That was my takeaway but of course only the OP can answer as to his actual intention.

Thank you to all that helped.
 

Alex Meek

macrumors newbie
Jun 10, 2015
7
0
Usa
Income is income paying little respect to whether you think of it as a genuine business or not. That said given the sum and the certainty, as specified by another publication, that you are working at a misfortune ($25 being not exactly the designer expense) and I don't see a need or motivation to report it. I'm not a bookkeeper however.