How to report and tax Google AdSense income

How to report and tax Google AdSense income

Reporting AdSense Google income on a tax return in easy and can be accomplished in a few quick and simple steps. This page provides information on how to approach determining tax on your AdSense Google income and how to report it on the federal tax return.

Reporting AdSense Google income involves filling out several tax forms. 

Must I report Google AdSense income and pay tax on it?

In general all your income must be reported to the IRS and state Departments of Revenue and is subject to taxation. Whether you end up paying taxes on your AdSense income (or AdSense revenue, see here AdSense revenue) depends on several factors which will be discussed later. State taxes apply as well.

How to report AdSense Google income (Google tax)

How you report Google AdSense income depends on whether you earn it as "other income" in addition to your full-time job or if you earn AdSense Google income as your, so called, "self-employment income."

In case you earn Google AdSense income while at the same time having a full time job, and your AdSense income is less than $400/year, you will find out that your AdSense income increases your tax liability when you report your Google AdSense income on your tax return. You will find out that either you are not going to get back as high of a refund as you did last year, or you may have to pay, because you have not paid Google tax on your AdSense income during the year. In this case you might want to look into itemizing your deductions (1040 Schedule A).

If earning Google AdSense income is your self employment (your full time job, or you just make more than $400/year), your Google tax reporting gets a little more complicated. You report your AdSense income on form 1040 (U.S. Individual Income Tax Return), and in addition to this basic form, you also need to be aware of Schedule C (Profit or Loss From Business) and Schedule SE (Self-Employment Tax). In this case, you do not itemize deductions, but you write off expenses (save your receipts). You might be subject to alternative minimum tax, and you will most likely need to pay estimated taxes. The following paragraphs explain more of this scenario.

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