I'm working on an Android game that eventually I'd like to publish. I was thinking about what is required for publishing games on Google Play and had some questions.
Aside from the license I have to agree to in order to publish through Google is there anything else I'm required to do?
If I decided to publish a paid app I would be keeping track of all income and reporting that to the IRS to pay income tax on myself right?
Would it be legally advantageous to make myself a company (Found a one-man company) instead of publishing as an individual for tax purposes?
Where can I read more about the legalities? Thanks,
David
Publishing Questions
1. If I decided to publish a paid app I would be keeping track of all income and reporting that to the IRS to pay income tax on myself right?
2. Would it be legally advantageous to make myself a company (Found a one-man company) instead of publishing as an individual for tax purposes?
3. Where can I read more about the legalities? Thanks,
1. Right. You said IRS, so that means you live in the USA. You also have to pay state tax, and there may also be municipal income tax.
2. Maybe. Depends on how much money you'll make.
3. The tax office websites of your country, your state, and your municipality.
The SBA also has many resources, including people who know about taxes. Check your local SBA office.
Would it be legally advantageous to make myself a company (Found a one-man company) instead of publishing as an individual for tax purposes?[/quote]
If it is just you, then from a tax perspective, there is probably no benefit to creating a company; i.e. incorporating. I recommend you book an hours time with a CPA who knows small business.
If you are in business without being a 'company', you are what's known as a "sole proprietor'--i.e. you are the business. That means you file taxes as a individual, though you have a couple extra forms to fill out (Namely Schedule C, for business income and expenses).
There are a couple options as to what kind of company to create. The simplest is an "LLC"-- "Limited Liability Company." In an LLC, your company is a separate legal entity, separate from you personally. But you still just fill out (relatively) simple income taxes, exactly the same as if you were a sole proprietor. There is virtually no tax difference between an LLC and a Sole Proprietor. (The main difference is liability; in a sole proprietiorship, you are personally legally responsible for your businesses; debts, suits, etc. So if someone is injured because of your game, they can sue you, personally, and (if they win) take your house, car, savings, etc. In an LLC, they can only sue your LLC. So if you have a house, and your LLC's bank account is only $500, they can only take whatever assets the LLC has (the $500 and your game))
There are more complex (and more expensive) kinds of Corporations to make-- "Subchapter S" or "Subchapter C" for example. These are a pain because you have to fill out separate Corporate tax returns as well as your individual returns, but there can be some tax advantages to them. (note many of those 'advantages' may be on the chopping block since, politically-speaking, they are often considered "tax loopholes.")
So make an appt with the CPA, but read up on "Sole Proprietarship" and "Limited Liability Company" ahead of time so you'll better understand what he's talking about.
A couple other recommendations:
Go to the bank and create a separate account for your business. It can even just be an additional account in your name at the bank. Take any money you get from you game and deposit it into this account-- pay any and all bills related to making the game out of this account.
Keep track of everything in a program like "Quicken".
Good luck!
Brian Schmidt
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