Indie Software Developers - How do I handle taxes?
- by Connor
I apologize if this is the wrong site to post on, perhaps someone could point me to the proper place if it is not.
Hello,
I am 17 years old and currently develop applications/games for Android and iPhone as well as develop internet websites and code a variety of my own projects. I have been very fortunate and have made a large amount of money and continue to make money online to the point where I do not need a stable job, though I'd like to get one after college.
I've never held a job anywhere, and have never had to pay taxes. I'm coming into a lot of issues and I am quite confused. I get money from MANY sources- 15 different advertisement networks(!), 4 different payment processors, 5 different affiliate networks and a variety of other sources. All of them pay to different places and at different times (checking account, PayPal, reloadable debit card, ect.)
I essentially have a list in a Notepad with names and login information for each source. I have also created a PHP script that uses cURL to grab all the revenue from each service, add it all up, then text me every few hours so I can keep track. It's a mess, but it's working OK, and I can create custom reports (for IRS?).
But enough of that, my questions are about taxes in the US, and how indie developers handle it all. I'm at slightly over $250k so far this year, with negligible earnings last year. I have it all stockpiled in a bank account and haven't touched it, I'm a bit scared to.
What do I file as? A sole proprietor, a business, just a regular person?
How can I handle all of the different revenue sources? (AdSense, CJ, LinkShare) So far none of them have sent me any paperwork on taxes and I've read that I'm supposed to pay taxes quarterly?
Do I need paperwork from EACH source to file? Or can I just say I got $x total and that'd be it?
What percentage do you pay of total earnings? Average?
Should I create an LLC? A corporation? Or stay as a developer?
What would be the cheapest options?
Could I go to jail? I haven't touched the money except a few dollars to help my parents pay the mortgage once.
Any insight would be great. My parents have no idea what I should do, both have no forms of higher education and both have no high school diploma's. They just live day by day with simple jobs.
I appreciate any help or experience with this.
