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Ask HN: What taxes you should pay for app stores income?

• anoncoward111 8y ago
  Disclaimer, I'm not an accountant but I can act like I know something about accounting :) You have a multi-member LLC. Any money received as revenue, and any money spent as an expenditure, must/should be reported on the LLC's taxes. Some LLCs pay taxes as if it was an individual human, but since there three of you, I believe the LLC entity would be taxed first. If you are receiving an income (w2 or 1099) from the LLC, then I believe you must pay taxes on that too, either in the USA or in your home country or possibly both if you are really unlucky. If you aren't receiving an income from the LLC, then you personally are fine. You presumably would only be taxed if you sold your shares in the LLC to someone else. Also, I think you might have to collect sales tax in some jurisdictions. It's pretty complicated, but the statistics show that you don'r get audited unless you are making over maybe 100k, or commit some seriously obvious fault like claiming 1 million USD in expenditures on food every year :)
  • keplerrocks 8y ago
    I think the LLC is not taxed, but we as owners /shareholders do. https://www.nolo.com/legal-encyclopedia/how-llcs-are-taxed-29675.html https://www.nolo.com/legal-encyclopedia/how-llcs-are-taxed-2... My question was if I should pay income tax. Foreign people should pay this tax if the income "effectively connected" to the US. I wondered if selling apps in the apple app store constitute "effectively connected income"
    • anoncoward111 8y ago
      Hmmm ok, so then based on that article and your opinion of the situation, it's debatable if you owe personal income tax on your share of the yearly income, which let's say is 33%. Is there a way to make sure you are only paying taxes on the yearly profit and not revenue? 100k in revenue is nothing if the business had 100k in expenses that year. What state is the LLC registered in? That will affect if you owe state taxes too, even if you live abroad. I'm sure if the income was large enough, the IRS would send you an audit saying you owe xyz +5% late penalty. If it's small and you have no physical address here and the income is entirely online, then perhaps you owe 0% tax. Confusing to me, really, as I've only ever worked W2, 1099, and cap gains for income
• foobarbazetc 8y ago
  Does Apple not allow businesses from your country to sign up? No one should create any sort of nexus with the US without understanding the implications. You need to talk to an accountant who understands your country’s tax law and US tax law. Usually that’s like 2-3 people in the whole country.
  • keplerrocks 8y ago
    We are from Argentina, the constant fluctuation of the country economical stability makes it really difficult to establish the business here. They force you to charge in local money and you can really loose a lot of money since the peso is currently sinking.
    • anoncoward111 8y ago
      My gut instinct here is to say you owe 0% taxes. If you don't have an SS number or a TIN (taxpayer identification number), there's no way for you to even file taxes. If your share of profit is less than $10,600 USD, then you owe 0% taxes anyway because of the standard deduction. Good luck in Argentina my friend! It is really so sad that the peso is being pressured like this.
      • deleted 8y ago
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      • keplerrocks 8y ago
        Yes, Argentina is in a really awful spot since we owe a lot of money to everyone and the economy is in resession. It is really sad to see happen again and again. I didn't know about the standard deduction, I'll look into it. Thanks
        • anoncoward111 8y ago
          It's my pleasure to help, friend! The world financial authorities have been very unfair to Argentina, I think, regardless of the debt situation. Yes, definitely check out the standard deduction. In your case it will probably save you a lot of money. Here's how a typical US tax return looks: W2 worker non married: ~15% tax rate federal (first 10k is tax free) ~6% tax rate state (some states do not tax) ~7.5% payroll tax (15% if you are a 1099 contractor, not w2) So you can see that it's typical to pay less than 30%. Even if you make $110,000 per year, your rate will be about 30%. Only if you are an athlete or insanely senior programmer will you pay 40-50%. But, since you do not physically live here or work here (like for example a bartender), I think you will be ok.
• cimmanom 8y ago
  The Apple App Store will collect sales tax on your behalf, I believe. Not sure about the Play store. Income taxes are almost certainly an issue. I’d suggest finding a few tax accountants and asking for free 20-min consultations to a) quickly assess whether you’re likely to owe income taxes at all; and b) decide which you’d like to work with.