How to Pay Taxes on YouTube Earnings

hi I'm Ben and I'm a chemistry teacher up until now my channel has been all about educating people in chemistry whether it's solving chemical problems or providing tutorials and walkthroughs I've been all about chemistry up until now but now I would like to Branch off from my normal routine of teaching chemistry and specifically I'd like to address the YouTube partners out there so if you are a YouTube partner and you're watching this video you may want to stick around and listen up because in this video I will be sh showing you how to pay taxes on your YouTube earnings so the YouTube partnership program is wonderful because it allows content Publishers the opportunity to make money off of their videos in the form of advertisements so all those advertisements that you see playing at the beginning or during a video that you have to skip or click out of or whatever those are actually making money for the people who work so hard uh to put that content out there now the downside to making money off of YouTube is that throughout the year here the monthly payments that you receive uh there are no federal tax withholdings on those payments so government's not taking anything out of your money so it looks like a lot of money you may be tempted to go play around with it or spend it or piss it away otherwise uh but they're not taking any money out of that however it is still taxable income and you must pay taxes on that income and the way that you do that is by writing a check and sending in to the United States Treasury uh and you have to file the appropriate tax form so that's what this video is all is going to be all about it's going to be about uh Which tax forms you need how to file them where to send the money if you need to send any money at all and everything in between so let's get into it so in this video it's going to be divided up into three sections so you can click the link for each section if you'd like to skip ahead and the first section has to do with the forms that you are going to receive so these are the forms forms that you receive from your employer uh I think most people they have another job in addition to making uh YouTube videos and they'll usually receive a form W2 or something like that and then they also get the tax forms that they receive uh from Google from YouTube so that's going to be about that how to get those forms uh the second section is going to be uh forms that you download yourself so the tax forms from the IRS website uh that's going to be which forms you need and how to get those and then the last section which is probably going to be the longest is how to fill out those forms and how to file them and where you send your return uh when it's all done so the first section in this video is all about the forms that you receive from your employer or employers and like I said earlier most people in addition to making YouTube videos they have either a part-time or a full-time job and typically you will get a form W2 and if you've had more than one job you'll get multiple forms W2 so again these come from your job and and uh if you haven't already gotten them you can just contact your employer or your former employer and they will uh send you your form W2 uh to the address that you provide now the next form that you're going to have to get is the one that you get from uh YouTube which is the 1099 MK so this should have been mailed out to you uh by February 15 however in my personal experience I had a hard time getting my form 1099 uh they didn't send it to me when they should have so I had to request a reissue so I'll go ahead and show you how to do that now so to request a reissue for your 1099 you're going to want to open up your web browser and then type in google.com AdSense and then log in if you haven't already done so and then this will bring you to the Google AdSense homepage once you're at this homepage uh you're going to locate a little gear symbol that's on the top right hand of the uh the top right hand corner of the screen and then click it that's going to bring up a drop down menu and then you will select payments so that will bring you to this new screen here the payment and then it'll be uh have your payment history on it and then you'll want to click on paye profile once you've opened up your PE profile there's a link at the very top that says edit you want to click that and then if your address hasn't been updated if you need to update your address uh you can make all of those changes right here uh to change your address and make it up to date so that Google Google can send you your $199 so assuming your address is up to date at this point you have to request your reissue and the way that you do that is actually very complex what you do is you click on the question mark on the top right hand corner and that'll bring up a help form and you want to type in the words Contracting entity so that's Contracting entity and then once you enter that you'll select the link that says Contracting entity is Google Inc and then when you open that up it'll show you this article and then you want to scroll down about Midway through the article and then there will be a section that says will you send me a form 1099 or 1042 at the very bottom of the section you'll see a light blue box that says if you haven't received or have lost your form 1099 you can request a new 1099 so then you're going to click that and then fill out all of the requested information so they can send you your new 10 999 now when I did this uh it was very um quick there was a very quick turnaround once I filled in this form and uh they sent me my 1099 I think it arrived in my mailbox uh within two days so there's a very quick turnaround but um the process of actually getting it though uh is very complex indeed so there's how to do that so the second section of this form has to do with the forms that you download from the IRS website which is irs.gov so if you go to irs.gov there are plenty of forms uh that you can download and the three forms that we need or at least that I use to file my taxes are a form 1040 a form 1040 schedule CZ and finally a form 1040 schedule SE so we're going to go to the IRS website and get our hands on all three of these forms so I'm going to open up my web browser I'm going to type in that URL which is I irs.gov and that's going to bring me to the irs's homepage then once you're there you're going to click on forms and pubs so you click on forms and pubs and then once you are at the forms and pubs page you're going to click this thing here that says current forms and pubs and now that we've clicked that all we have to do is just search for the forms that we need and then find them so the first form like I said was the form 1040 so I just type in 1040 and it's the first hit all I have to do is download this to my computer uh using my web browser very easy next one I need is the uh schedule CZ so I'm going to type in schedule C EZ and it's the first hit once again going to download that form to my computer and the last one that we need is the schedule SE which again after searching for schedule SE the very first hit that's going to be the one that we want so those three forms need to be downloaded uh to your computer and you have a choice you can either print them out and fill them out by hand or you can fill them out electronically so the choice is yours so the last section of this video has to do with filling out and filing your tax forms So currently what we're looking at is both pages of the uh form 1040 so you want to fill out all of the applicable sections of this form uh the first section up here this is just where your personal information goes so your first name and initial last name social security number uh and you might fill it out differently depending on if you are married or you're uh single or whatever your marital status might be and then uh your filing status uh and your exemptions that's going to depend on if you uh can claim yourself or if someone else can claim you and all that good stuff your income that's very important section because in box seven of the income section is where you're going to put all of those wages salaries tips ET ET from all of your forms W2 so you take everything from that box that says wages salaries tips Etc from all of your W2s you add them together and that will go in box 7 and then in box 12 is where the business income and that's going to be the income that comes from your YouTube channel is going to go so that's going to go in box 12 and that's uh that value that number that you get is going to come from your form 1099 MK uh that that was sent to you by Google and then uh you can combine those and that'll give you Box 22 also if there're any other forms of income that apply to you with me it was just boxes seven and 12 and then they added up together to give us uh to give me Box 22 and uh that took care of it for me but again it might be uh different for your particular situation and then there's the uh what's called the adjusted gross income uh for part of the form down here and and uh the only box that I filled out was box number 27 uh there were some expenses that I had I bought some software and some Hardware to be able to film videos and produce content for my channel uh so I uh deducted that from my taxes included it in box 27 and then you can use uh everything on this page to give you boxes 36 and 37 and the rest of it is pretty straightforward so on the second page of this 1040 uh what we see is the basically the point of this page is to figure out whether you owe money whether you have to pay more money uh in taxes or uh whether you'll be receiving a tax return so this is where you would figure that out so again um with these sections they're pretty straightforward um you're just going to want to uh follow the instructions exactly again some of these boxes can be left blank um in my case I was able to leave box 42 blank for the exemptions didn't apply to me so I just wrote zero uh everything else I had something in there uh based on the previous page of the form and there's some other things that are going to uh ask you to attach a schedule SE and remember that was one of the forms that U I told you to download so all that's going to be taken care of and then of course at the very bottom your signature your date your occupation phone number uh all that stuff and then the 1040 form will be good to go so the next form we got to fill out is the schedule C EZ form and at the very top of the first page on this schedule CZ you'll see a flowchart and basically this flowchart is supposed to differentiate whether you can fill out a schedule C EZ or just a plain old Schedule C um if you're just a regular guy like me um making YouTube videos by myself uh don't have a whole lot of expenses don't have any employees the schedule CZ is the is the way to go and then when it comes to uh this box a here where it says principal business or profession including product or service uh all I did was I just typed in YouTube video ads and then there's another section here for your business code uh and there's more information about that on the second page of this form and my business code that I used was 54180 uh which corresponds to advertising which seemed fitting because that's how the money is made it comes from advertising Revenue other than that um the uh other part of this form uh is other important important part of this form is part two where you figure out your net profit so like I said earlier with the 1040 if there's any expenses that you had uh in the production of your videos like for me I bought some software I bought some Hardware um you would list that in box two of your excuse me of your um of your expenses and then you would calculate your net profit from the amount of money that you made from Google from YouTube minus the expenses and that will give you your net profit and then the second page um of this schedule C form I didn't even fill out I didn't I left this entire page blank there's just U mostly information on this page about what to do and then there's an optional worksheet down below where it says um you know you can uh list other expenses and deductions and things like that which for me were not applicable so as far as I see it the schedule CZ uh has been finished and we can move on to the next form so the last form that needs to be filed with your taxes on your YouTube earnings is the schedule SE form and just like with the schedule CZ uh on this schedule SE form there is a flowchart at the very top of the page so you basically just answer the questions and follow the flowchart and uh what that flowchart is trying to determine is whether you can fill out the short version or the long version of the schedule SE the short version is located right here on page one and the long version is located on the second page of the schedule SE my particular situation I was able to uh fill out the short version which is located at the bottom and again um all this is pretty straightforward you just uh you know write in your net profit and your loss which is already been figured out from Schedule C at this point and um on line four you multiply line three by 92.35% so it's a little bit of math a little bit of calculating but nothing too complicated and uh again just you know follow the instructions um read each line and you should have this form knocked out no problem so at this point we have filled out all of the necessary tax forms now the only thing left to do is to uh make copies of them from for your own personal records that way you know how to do this again next year so it's not nearly as hard next year as it was this year and then uh you have to mail them out now again your 1040 that's the one that's going to tell you uh whether or not you owe money okay and if you owe money you're going to send it you're going to send your tax return to a different place than if you don't owe money so there's a nice little uh page here on the IRS website if I can pull that up yes it's right here so for your 1040 uh it depends on what state you live in and it also depends on uh if you owe money or not so in my particular situation I live in the state of Florida so that's the uh second row over here and I am not going to be enclosing a payment so I am going to send it to this uh Austin Texas address right here now if you do owe money and you are enclosing a payment you want to make that check payable to the United States Treasury not to the Internal Revenue Service you want to make it payable to the United States Treasury now again whether you have to pay money or not it really all just depends on how much YouTube earnings you have versus earnings at your other job me you know I have a full-time job I work as a high school chemistry teacher uh so I don't make a whole lot of money but I don't make a whole lot of money off of YouTube either so the federal with withholdings that came from my real job uh they were more than enough to offset the lack of federal withholdings from my YouTube money so even though I am paying my taxes I'm not going to end up owing money in the long run because that money that I owe is just going to be deducted from the tax return that I would already be receiving so again um I hope this video was helpful um if you have any questions please feel free to ask although keep in mind I'm not a tax expert I'm a chemistry expert so anyway that's it and um all right happy filing

Channel: Ben's Chem Videos

Views: 37,286

Keywords: Tax, Taxes, Youtube, Partner, Partnership

Id: _KcdwHMMEbI

Length: 16min 17sec (977 seconds)

Published: Sat Apr 05 2014