Does Google Report My Income To The IRS?
If your gross earnings for the year are over $600 Google is required to report this to the IRS, they will also send you a 1099-misc form. If your gross earnings are less than $600 it is possible that you will not receive a 1099-misc, this "does not" mean that you do not have to pay taxes on your earnings, you are still required to file a Schedule C and claim this as income. The image below shows an example of a 1099-misc form. This form will tell you how much your gross earnings were for the year , and whether you had any taxes withheld throughout the year.
How can I have taxes withheld during the year?
When you first registered an account with Google, you filled out a W-9 form that asked for all of your personal information. There was also a box that said "Exempt from backup withholding", if you checked this box you chose not to have any taxes withheld during the year, which means you will pay the taxes come tax time. If you left the box unchecked there should be 28% withholdings on each check. You can change your tax information anytime by logging into you Adsense account, clicking on the "My Account" tab, then click the "Tax Information" tab.
What do I need to do after I receive my 1099 form?
You will need to file a Schedule C to claim your earnings and deductions, you will still need to file your normal tax form(1040 or whatever you use). If your net earnings(gross earnings minus deductions) are more than $400 you also have to pay Social Security/Medicare Tax, for this you will need Schedule SE. Visit the Tax Forms page for step by step instructions,with images, on filling out these forms. We recommend using an online tax program to file your taxes, these programs are very simple, they do all the work for you. The free programs do not include the Schedule C and Schedule SE forms, which are needed to file taxes for the self-employed. We have done a little research and the best place, with the lowest prices, to file self-employment taxes is at TurboTax.com, they also include free audit support. Click Here to go to the TurboTax website.