Do teens need to pay taxes?

[Pixoaero]

Hello everyone. I have a very important question to ask regarding taxes.

My friends and I are planning to create an online "business." Its more of a project, however. What we do is some of us develop 3D games, in JRE, and sell them online. Our second flow of revenue and income will come from advertising. Our website will have ads (not pay per click) on them. Also, on our very popular youtube channel, we will have ads too.

So I guess the question i would like to be asking is do we need to pay taxes for the above sources of income? (selling games online, and earning money via YouTube ads, and Yahoo! ads.). If so, how would we go about actually paying the taxes? Could we pay them online?

Also, My friends and I are teens.

Thank you all in advance.
Ok. Now, what if I told you guys that we make $400+ off this small business??? What would i do then? Im the tax manager of the project.
Ok, so i must file self employment taxes. Does everyone in our project have to do the same? Also, is there any way to pay these taxes online? If not, then how do we do so? Mailing it to the IRS im guessing?

[Shriekingwinter803]

Make more than $400 a year each, then ask again.
Not easy to make money at this.
There was a kid here that made $100 the whole year, giving it his all
^ same thing you're doing.

[rtfm]

It has nothing to do with your age and everything to do with your income. If you earn more than $400, you must file a return and pay self-employment taxes.

[Bobbie]

And you are using the words WE and MY FRIENDs and also BUSINESS operation.
You and your friends may need to seek some good face to face professional assistance about this matter before it would get out of hand for tax purpose and the IRS and your local tax authority for any possible sale and use tax collectios that they may REQUIRE to colllect for them and then use to CORRECT forms and schedules to send them the taxes that you might have to collect for them as they will schedule you to do using the correct forms for that pupose.
YES when each one would have their own separate account set up with the online business for this purpose and time in you life.
Might even be a partnership business operation for this purpose and time in your life.

Generally, e-business consists of business transactions conducted over open computer networks.
As a self employed independent contractor using the schedule C and the SE of the 1040 income tax return for this purpose and also you will have to use the 1040ES to make any quarterly estimated taxes that you might be required to make to pay yourself employment taxes social security and medicare taxes on your NET profit from the schedule C plus any federal income tax that you might owe for the tax year.
And even IF you do NOT receive the 1099-K copy you would still be required to use your good detailed daily records of all of your TOTAL sales and expense on your correctly completed income tax return for this purpose and if you would need to determine if it would be easier and better for you to make the quarterly estimated tax payments during the tax year or JUST wait until the end of the tax year and try and try and make sure that you do have enough funds saved up to pay the total amount of taxes plus the amount of interest and penalties that MIGHT be added to that owed amount for failing to pay the amount timely each quarter in the year as they should have been done at that time with the last for the 2012 tax year being due around January 15, 2013.

Partnerships

A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.

A partnership must file an annual information return to report the income, deductions, gains, losses, etc., from its operations, but it does not pay income tax. Instead, it "passes through" any profits or losses to its partners. Each partner includes his or her share of the partnership's income or loss on his or her tax return.

Partners are not employees and should not be issued a Form W-2. The partnership must furnish copies of Schedule K-1 (Form 1065) to the partners by the date Form 1065 is required to be filed, including extensions.

If you are a partnership or a partner (individual) in a partnership, use the information in the charts below to help you determine some of the forms that you may be required to file.

http://www.irs.gov/Businesses/Small-Busi...rtnerships

Starting a Business

http://www.irs.gov/Businesses/Small-Busi...a-Business

Publication 583 (12/2011), Starting a Business and Keeping ...

http://www.irs.gov/publications/p583/index.html

Small Business and Self-Employed Tax Center

http://www.irs.gov/Businesses/Small-Busi...f-Employed

Hope that you find the above enclosed information useful. 01/09/2013