wow... I never accused her for not incorporating a company.
I am old enough to know the tax laws since I am in college and studying business.
I know the U.S laws. I am in the same state she is in. I am in the process to start my own business.
I know what is needed. If you are making income more then 2,000 you must have a business name and a business tax id.
this doesn't mean a corporation. to make a corporation you have to fill out paper work to incorporate a corporation.
You need a business name to get a business tax id. I done look up in michigan and never found a business name by her name. I done a whois and know
her name and address. She is hosted by godaddy.com
by the laws of taxes and GAAP (generally accepted accounting principals) .
She needs to be a business not a corporation that is something totally different.
She has to pay business tax On gross revenues.
So I been looking up her stuff and not finding any business name . She also needs to have a business account.
Any hobby that generates more then 2,000 is declared a business not a hobby according to the law.
anything less then 2,000 is viewed as a hobby and you can get a write off on your personal tax .
So she dosen't have a business name regsitered so there is no way she can get a business tax id without having a business name.
Therefor she is not paying business tax. Even if she does pay the taxes based on personal income. This is still illegal and the IRS could easly
charge her with tax evasion.
since she is not paying business tax.
If you don't belive me then ask any accountants that are cpa not accounting techs or plain accountants with a bach.
Cause CPA know accounting fully cause they have to take a 14 hour exam testing on all stuff about accounting and taxes.
So people with a bach in accounting can not be solid enough statement.
I am just pointing this out. I bet she is not the only one doing this.
I am not picking on a 15 year old. It's a 17 year old and she dropped out of highschool.
I ain't picking on her. I thought there has to be more to it. She has powerful connections.
Just wondering if there is a conspiracy to it. She got alot of interviews.
She is not really working hard. She is using adobe none licensed to make myspace layouts. However She knows the coding part.
She dosen't have to start a business but she by law has to pay business tax..
They look at the overall activites. To see if it's a profitable activity meaning if it's a business.
that 2,000 or more means you must file a tax return.
If you google around hobby tax laws. You will not find out the exact real laws. You will find many websites talking about why you should make it a
cause you can make more wright offs.
So for me to prove my point I would have to look for the tax law in the IRS codes.
I don't have the time to spend. So that this as a general talk. Not something I am blaming her of..
I am in my process making a buisness. I finsihed one year of college and I am close to finishing my second year. I know the basics of accounting and
business. I also took 2 classes in business law.
Which explains all about contracts and copyright and all business good stuff.
So I do know what I am talking about. I just right now don't find any evidence of her paying business tax not corporation tax.
Earlier some of you accused me of accusing her of trying to be a corporation which I never did.
A business is different from a corporation. It differs by legal means. It's a huge difference.
C - corporation is the one that pays double corporate tax.
I currently own 2 websites. So I know about the tax laws towards websites. There is a thin line that the tax laws looks at to define a hobby and
define a business.
when the tax law defnines your activities as a business you must apply for a business name cause you register your business name at the same time you
register for a IRS tax id. it's part of that process.
you don't have to have a store or a shop or a big business but you have to pay business tax cause your operations is a business.
you can stil say your not doing it for a profit ... which allows you to make a none-profit organization.
According to what I see with this teenager. It shows her as a business not a none-profit organization.
It is something very technical in tax that I would have to really look at her tax return to fully know 100%.
I am just saying my opinion and educated guess just by doing a simple research on her.
So I thought that she must have connections with someone powerful. That is giving her advise or helping her get away for paying business tax.
Small business pays a business tax. Business tax is less the corporation tax.
So from what I see . She is supposed to be paying business taxes on her operations. It's also can help her out with growing the business but also
her profit is taxed by a business tax.
her income from being a employee of the business is stated on her personal tax.
From how I am seeing it since no business name is register with her name. She is not paying a business tax.
Now you may question me that if this is true why the IRS is not on her???
well interesting quesiton They usally don't check your returns for legality. They do look at your retures every 5 years I hear. they just check your
However I hear it's very rare they will audit you. it's a low percentage. IRS trust people for being honest.
However they found about 400,000 people having people labeling hobbies yet they are business operations. To avoid business tax.
This is how you get rich fast.
This girl is not the only one there are about 10 other websites that does the same thing she does. They are doing the same.
I think they are putting the gross revenuse as personal income and do pay income tax.
Which is lower. If you know personal tax laws You pay less taxes based on higher wages/ taxable income.
So if you see what I mean avoiding business tax is just like not paying taxes at all.
I am sure she is paying taxes. Just not paying the full she is required to do.
Now I don't know if she is doing it on purpose. I bet her mom is doing it this way cause she got others advice. I am sure alot of people do this and
still dosen't get caught.
if someone like me tip off the IRS about this and they investigate her they then can charge her for tax evasion.
Now I don't want to do that due to being look bad.
[edit on 24-1-2009 by computerwiz32]