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Income From Android App To Minor(-18, UK and USA)


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#1 CryoGenesis   Members   -  Reputation: 495

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Posted 06 September 2012 - 11:21 AM

I was wandering what the laws are about generating income from software if you're not older than 18.
I'm guessing it's fine seeing as you wouldn't have to pay income tax because you're a minor. I don't think it's against the law because you wouldn't be working full time on the app and even if you were it wouldn't be official work because you're not being payed on an annual basis.

Also, is this the same in America?
If it is illegal are there any ways around it?

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#2 frob   Moderators   -  Reputation: 21341

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Posted 06 September 2012 - 04:05 PM

In the US you do need to pay income tax, even as a minor. It does not matter if you earned it as a traditional salary or if you earned it through a hobby business, you still must pay taxes on it. Penalties for not reporting taxable income are fairly harsh.

I cannot imagine that as a tax loophole in the UK; governments are serious about getting their money.

Edited by frob, 06 September 2012 - 04:06 PM.

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#3 bschmidt1962   Crossbones+   -  Reputation: 1834

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Posted 07 September 2012 - 09:48 AM

A couple points..

1) The android marketplace requires parental permission of your are under 18. (Android Marketplace Docs). Though you didn't ask, Apple has the same restriction. For apple, the parent technically owns the account and lets the minor use it.

2) Regarding taxes... Sorry. As frob pointed out, age, salary, etc don't matter. In the US, if you earn income, you need to pay taxes. However, this can be a great opportunity to learn some of the things you need to do in order to run a business.
In order to properly pay your taxes you'll need to:
Learn to keep good records.
Ideally maintain a separate bank account for your business.
Learn to keep track of expenses and track income.
Learn how to calculate your profits.
And, yes..... Learn the joys of filing taxes as a "businessperson" (which will require the good records you've kept)

In the US, you'll probably end up filing your own tax return (or tacking on your parents) and enjoy filling out "Schedule C" (there's a 1-page version called Schedule C-EZ).

These are all great skills to learn and have, especially if you end up going into videogames...

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#4 CryoGenesis   Members   -  Reputation: 495

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Posted 12 September 2012 - 10:51 AM

Thanks for the help. Although, I don't think it would be a problem for me. I live in the UK where you don't have to pay tax on anything until you are no longer a minor. The parental thing wouldn't be an issue. I'm not too sure on income tax but I know people who have had minimum wage jobs without paying tax due to them being a minor.

#5 frob   Moderators   -  Reputation: 21341

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Posted 12 September 2012 - 11:14 AM

I'm not sure where you got the impression that minors don't need to pay taxes in the UK.

A few seconds of Google pulls up this, along with many other similar sites:

Many people believe that students and minors do not have to pay tax, but it actually doesn’t matter what age you are. The deciding factor on what tax you pay is how much you earn. The only reason that many minors and students do not pay tax is because they earn less than the personal allowance ‘tax free threshold’ of £6,475 per year.


If you earn income the government will try to get a chunk of it.
Check out my personal indie blog at bryanwagstaff.com.

#6 TechnoGoth   Crossbones+   -  Reputation: 2766

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Posted 12 September 2012 - 11:51 AM

Its also worth noting that in the UK PAYE and NI are normally handled by the employer when you are working. In this case though of making money from apps you'd be classed as self employed an expected to fill a self assessment form along with pay your required contributions.




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