David Megginson said: > Jim Wilson wrote: > > > You see, at least on the federal level you can collect quite a large sum of > > money as "gifts" before you have to put anything on your tax return. > > I am not intimately familiar with U.S. tax laws, but I would be very > surprised if the IRS allowed Curt to count advertising revenue as a gift. I > will admit that I do not know what the case would be for voluntary > donations, so a PayPal donation button might be an OK choice. > > > So in a nutshell my advice is: (1) Think about the project image issue. (2) > > Don't be afraid of small business. People do it every day. It doesn't have > > to be complex or "commercial". > > The overhead is not horrible, but it's important not to underestimate it -- > you'll be hard-pressed to find any small business owner who was not > surprised by the amount of non-billable work involved and dismayed by the > number of regs to learn (and I understand that the U.S. is much worse than > Canada in this regard). I've set up three corporations and have been running > my own small business since 1998, and the extra time required is by no means > a full-time or even half-time job, but it is there. I've never done > anything disasterous, but I did have to write off USD 18K in accounts > receivable from a customer that went bankrupt, and I lost another USD 9K to > the government early on because of tax laws I didn't fully understand yet (I > wrote myself a bonus cheque a couple of months later than I was supposed to, > and ended up with a mini-audit from the province of Ontario and USD 1.5K in > accounting fees on top of the tax penalty). > > I don't regret going into business for myself, but it's a big commitment, > not a side project. If someone already has too little time available, as is > Curt's problem, spending even more time managing customer relationships, > sending out invoices, chasing down bad accounts, filling in tax forms, etc. > might not be the best choice, especially if the potential revenue is (as I > suspect) a couple of thousand dollars per year at best. > > > P.S. Note, I am not a CPA or a lawyer, but I've been intimately involved in > > starting up corporations (one was my own) and have filed a few schedule C > > forms over the years. Talk to a CPA who understands that you want to "keep it > > simple". Generally speaking business lawyers don't know what "keep it simple" > > means (or rather they recognize that "simple" != "legal fees"). > > The problem is that the CPA's fee alone will probably represent a > significant percentage of the potential annual revenue. >
I'm not disagreeing with you, but collecting a few donations from PayPal shouldn't require anything. That's the point. If (only if) it is required, a simple schedule C is routine for little things on the side and usually takes about 15 minutes to complete. Probably a million or more get filed in the US every year. There's even a short form version that covers most side hobby type things. Maybe I've missed something in this thread, I am not talking about a consulting business with customers, time billing, etc. Such a business is just exactly as you describe, except maybe for folks that just do a little moonlighting in the local neighborhood. Yes, schedule C would probably be required for advertizing revenues (if the proceeds are above the annual minimum which has got to be at least $500). That's why I mentioned it earlier. FWIW I'm not keen on the ad idea either. I don't think it would produce much anyway. As far as the CPA is concerned, of course they charge a good fee for their time if you ask them to structure a business or do a plan, financial statements, returns, etc. There are at least a couple in town here who will answer a simple question they don't have to research like "how much can I collect in donations before filing a schedule C" (just don't make the call during tax season :-)). For that matter the IRS 800 number offers the same info and probably the website does too. Best, Jim _______________________________________________ Flightgear-devel mailing list [EMAIL PROTECTED] http://mail.flightgear.org/mailman/listinfo/flightgear-devel
