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Interesting! I stand corrected. Next thing I don't understand with that document is what is "earned" income. Are app store sales "earned?" I'd say so... con

Interesting! I stand corrected. Next thing I don't understand with that document is what is "earned" income. Are app store sales "earned?" I'd say so... constantly having to update the software -- I'm earning it.

patio11 12y ago
Your profits resulting from sales on the App Store (less such expenses as are reasonable and necessary to achieve that income) are, unquestionably, earned income resulting from your personal contribution to a business. http://www.irs.gov/Individuals/What-is-Earned-Income http://www.irs.gov/Individuals/What-is-Earned-Income Most forms of "unearned income" are where you're getting compensated primarily for capital rather than labor. For example, if you were to sell the business, the proceeds from the sale would ordinarily not be earned income. (There are sticky wickets around that question, which you'd want to ask a competent professional adviser about. Any adviser who tells you App Store income is unearned just lost their status as a competent adviser.)
- codecamper 12y ago
  Yup, it seems that it may be OK for me to claim the Foreign Earned Income Exclusion. Too bad I didn't know about it and stayed too long in the US during 2010-2012. Still... for 2013 and on, I think I can claim it. Last piece of the puzzle is the tax home. I travel from country to country about every 3 months. Do I even have a tax home?
semperfaux 12y ago
Is this facetious? Because it's a little funny to expect the IRS to be so literal. In my experience, either it's "earned" in that it's been paid directly to you or it's indirect income (e.g. dividends you were paid on an investment you aren't directly working on or appreciation you haven't collected on) that are still going to be taxed on in one way or another.
- codecamper 12y ago
  They are incredibly literal in a few cases. Such as: "Professional fees. If you are engaged in a professional occupation (such as a doctor or lawyer), all fees received in the performance of these services are earned income." (great.. special rules for lawyers) But they make up for it by loving artists: "Income of an artist. Income you receive from the sale of paintings you created is earned income." I wish they sit down and analyze software and make some hard & fast rules -- it's the computer age and we are being treated like "writers" or "professionals" or whatnot

patio11 12y ago

Your profits resulting from sales on the App Store (less such expenses as are reasonable and necessary to achieve that income) are, unquestionably, earned income resulting from your personal contribution to a business. http://www.irs.gov/Individuals/What-is-Earned-Income http://www.irs.gov/Individuals/What-is-Earned-Income Most forms of "unearned income" are where you're getting compensated primarily for capital rather than labor. For example, if you were to sell the business, the proceeds from the sale would ordinarily not be earned income. (There are sticky wickets around that question, which you'd want to ask a competent professional adviser about. Any adviser who tells you App Store income is unearned just lost their status as a competent adviser.)

codecamper 12y ago
Yup, it seems that it may be OK for me to claim the Foreign Earned Income Exclusion. Too bad I didn't know about it and stayed too long in the US during 2010-2012. Still... for 2013 and on, I think I can claim it. Last piece of the puzzle is the tax home. I travel from country to country about every 3 months. Do I even have a tax home?

semperfaux 12y ago

Is this facetious? Because it's a little funny to expect the IRS to be so literal. In my experience, either it's "earned" in that it's been paid directly to you or it's indirect income (e.g. dividends you were paid on an investment you aren't directly working on or appreciation you haven't collected on) that are still going to be taxed on in one way or another.

codecamper 12y ago
They are incredibly literal in a few cases. Such as: "Professional fees. If you are engaged in a professional occupation (such as a doctor or lawyer), all fees received in the performance of these services are earned income." (great.. special rules for lawyers) But they make up for it by loving artists: "Income of an artist. Income you receive from the sale of paintings you created is earned income." I wish they sit down and analyze software and make some hard & fast rules -- it's the computer age and we are being treated like "writers" or "professionals" or whatnot