How would taxes work for U.S. if your ot made money?

[michaelsilvers7]

Hey guys, so I understand no one in here is probably a tax consultant, so I understand I'm probably shooting in the dark, but it's worth asking! Basically, I've been working on my own ot, and it does use the real map (which I know is more risky in terms of getting sued by Cipsoft, but I doubt that will happen as to my knowledge it's never happened before, and further I don't assume my server would ever be popular enough to trigger them to begin with. + Other U.S. ot's such as Noxious have been going strong for a decade with presumably no issues in that department). Anyway, I'm not too worried about cipsoft directly, I'm far more worried about the tax pirates in my country lol. Does anyone know how one would go about legally filing taxes on a successful tibia OT? Or if it's even possible?

 

[bakkens]

Even if you call it "donations" the IRS sees it as income. You're providing a service (server hosting and maintenance) and getting paid for it. Whether it falls under hobby income or self-employment income (Schedule C) depends on how seriously you're running it.

 

[JeiDi]

Not sure about the US, but calling coins/premium purchases "donations" in my country is tax avoidance, so that's the main thing you should probably avoid everywhere. Other than that, it's always best to ask your accountant (or, if you don't have one, just find one for consultation).

In my country, it was a simple sale, like any other digital good, with 23%VAT added on top of the sale.

 

[michaelsilvers7]

Even if you call it "donations" the IRS sees it as income. You're providing a service (server hosting and maintenance) and getting paid for it. Whether it falls under hobby income or self-employment income (Schedule C) depends on how seriously you're running it.

So basically you're saying it would just be 10.99 filing as a self employed buisness, and their donations would be my income I would report on? Similar to like a tradesmen with his own business?

 

[Sranie12]

Not sure about the US, but calling coins/premium purchases "donations" in my country is tax avoidance, so that's the main thing you should probably avoid everywhere. Other than that, it's always best to ask your accountant (or, if you don't have one, just find one for consultation)

Poland & United Kingdom
If users get anything (coins, premium, items) → it’s NOT a donation, it’s a sale
Calling it a “donation” doesn’t matter, tax authorities (like HM Revenue and Customs) look at what actually happens

“Donate $5 → get coins” = taxable (VAT + income)
“Donate $5 → get nothing” = real donation

So basicly darkrest did great cheat on Tax Office, and recommending it for other ppl? Damn
I think Tax Office should take a look at this darkrest owners and their taxes ;P
@

michaelsilvers7 asking about it here is not too good idea, as you see jedi told you 100% fake info about taxes, so the best way is to ask accountant in your country or just ask someone who provide any intangible digital goods​

For Example in Poland if you earn less than 7 059 euro per year, its tax free, more you need to pay tax.

 

[JeiDi]

Poland & United Kingdom
If users get anything (coins, premium, items) → it’s NOT a donation, it’s a sale
Calling it a “donation” doesn’t matter, tax authorities (like HM Revenue and Customs) look at what actually happens

“Donate $5 → get coins” = taxable (VAT + income)
“Donate $5 → get nothing” = real donation

So basicly darkrest did great cheat on Tax Office, and recommending it for other ppl? Damn
I think Tax Office should take a look at this darkrest owners and their taxes ;P
@

michaelsilvers7 asking about it here is not too good idea, as you see jedi told you 100% fake info about taxes, so the best way is to ask accountant in your country or just ask someone who provide any intangible digital goods​

For Example in Poland if you earn less than 7 059 euro per year, its tax free, more you need to pay tax.

I literally wrote that we didn't use the "donate" keyword anywhere, and we paid VAT on every sale lol

 

[michaelsilvers7]

Poland & United Kingdom
If users get anything (coins, premium, items) → it’s NOT a donation, it’s a sale
Calling it a “donation” doesn’t matter, tax authorities (like HM Revenue and Customs) look at what actually happens

“Donate $5 → get coins” = taxable (VAT + income)
“Donate $5 → get nothing” = real donation

So basicly darkrest did great cheat on Tax Office, and recommending it for other ppl? Damn
I think Tax Office should take a look at this darkrest owners and their taxes ;P
@

michaelsilvers7 asking about it here is not too good idea, as you see jedi told you 100% fake info about taxes, so the best way is to ask accountant in your country or just ask someone who provide any intangible digital goods​

For Example in Poland if you earn less than 7 059 euro per year, its tax free, more you need to pay tax.

Buddy, what in the world are you on about? My question has basically zero to do with the validity of "donations" and/or how to cheat the tax system by falsely claiming sales as donations, and in fact it's actually the exact opposite and me inquiring on how to legally go about filing taxes on the potential my future server makes revenue in the future. And who is "darkrest"????

 

[Sranie12]

Buddy, what in the world are you on about? My question has basically zero to do with the validity of "donations" and/or how to cheat the tax system by falsely claiming sales as donations, and in fact it's actually the exact opposite and me inquiring on how to legally go about filing taxes on the potential my future server makes revenue in the future. And who is "darkrest"????

That's what I told you shortly, what to avoid, to avoid problems! Asking here = In My Opinion, not goood idea

 

[bakkens]

So basically you're saying it would just be 10.99 filing as a self employed buisness, and their donations would be my income I would report on? Similar to like a tradesmen with his own business?

I don’t know the US rules 100% but to be safe you should treat it like a store/business, but you should double check the rules just in case

 

[peteralto]

In my country, opening a church is easier than opening a company, and both are considered businesses. However, churches have tax immunity, so with a good statute about a supposed religious structure is enough to avoid questions, and in this case, it's possible to make "donations" receiving gifts or favors in return. They launder a lot of money this way.

 

[Bee King]

Poland & United Kingdom
If users get anything (coins, premium, items) → it’s NOT a donation, it’s a sale
Calling it a “donation” doesn’t matter, tax authorities (like HM Revenue and Customs) look at what actually happens

“Donate $5 → get coins” = taxable (VAT + income)
“Donate $5 → get nothing” = real donation

So basicly darkrest did great cheat on Tax Office, and recommending it for other ppl? Damn
I think Tax Office should take a look at this darkrest owners and their taxes ;P
@

michaelsilvers7 asking about it here is not too good idea, as you see jedi told you 100% fake info about taxes, so the best way is to ask accountant in your country or just ask someone who provide any intangible digital goods​

For Example in Poland if you earn less than 7 059 euro per year, its tax free, more you need to pay tax.

I don’t know either of them, but I stopped by to read… and my God, you’re really bad at text interpretation, huh? haha see you later.