When you first get a taste of PayPal and earning money online, the inevitable question crops up: “Hey… Do I have to declare this?”
Or maybe you’re the type that says something like, “Oh wow… It would be so easy to just… not declare this. Who’d know?”
Well, you would, for one. There are plenty of reasons to declare your income, and your morals are one of them. But beyond that…
Governmental agencies are slow on the uptake. The chances of you having to hide your $20 fortune you intentionally left off your income tax return while representatives from the Feds with large guns, arrest warrants and big, snarling dogs bang on your door demanding entry are … uh, slim, to be honest.
But it could happen. “That’s impossible. The government won’t find me,” you scoff. Unfortunately, yes, they could.
All business entities report income and expenses – that includes PayPal. From what I read on the Internet, they do disclose information to the IRS (don’t know about the Canadian Feds, but hey). Anyone you worked for will be quick to want to write you off as an expense. And anyone who worked for you should declare their income.
Your name is going to come up somewhere, someday… Maybe not for twenty or thirty years, but it just could happen.
Then there is the prime-time television version of declaring money to the government:
My accountant was the first person to ask me, “How many people know you’re making money online?”
I blinked, stunned. I’d earned my first $50 and was calling for advice. It sounded like a mafia sting. “No one,” I almost whispered.
And suddenly, standing on my back porch, I felt like there were spies everywhere, watching me. “Why?” I wanted to bury that $50 so that no one would ever find it. Destroy the evidence.
“Good, keep it that way,” he answered cryptically. “You never know who might want to get back at you.”
There is always the risk of being sold out and squealed on. A pissed-off neighbor, a bitter business partner or a jealous ex… Anyone could pick up the phone and make a call to the government that brings your little secret venture crashing down. People are spiteful that way.
Maybe it’ll never happen, and maybe I’m blowing the situation way out of proportion, but in today’s day and age, when life focuses so much on how much you have versus what everyone else has… Better to be safe than sorry.
What’s the date of this article? And you have no links to the other parts 1,3,4,5, and 6.