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If a company makes a payment to an individual, must it pay taxes for it? Federal

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  • If a company makes a payment to an individual, must it pay taxes for it? Federal

    Situation: there is an online social network that raises money from online ads, like the Google AdSense ones. It pays its best users 50% of the revenue that comes from those ads; this is a commitment stated in the T&C, not just a random gift or prize.

    - Will the company have to pay taxes for this payment? Can it deduct them? What are the thresholds?

    - And as for the individual, must he/she pay taxes for this income? If he/she decides to use it for charity purposes, can he/she deduct them?

    This example applies for a US-based, legitimate and audited company.

    Thanks for your help!

  • #2
    Originally posted by Will J View Post
    Situation: there is an online social network that raises money from online ads, like the Google AdSense ones. It pays its best users 50% of the revenue that comes from those ads; this is a commitment stated in the T&C, not just a random gift or prize.

    - Will the company have to pay taxes for this payment? Can it deduct them? What are the thresholds?

    - And as for the individual, must he/she pay taxes for this income? If he/she decides to use it for charity purposes, can he/she deduct them?

    This example applies for a US-based, legitimate and audited company.

    Thanks for your help!
    This answer still applies:

    http://forum.freeadvice.com/showthread.php?t=400666

    Comment

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