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Steam Direct Tax things

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2 comments, last by Hodgman 5 years, 11 months ago

Hi, I'm 15 and i want to publish a game to steam, but looking through the steam direct info for tax, it confused the hell out of me.

I plan to sell my game for free, but have a soundtrack available for 4.99 USD. One thing i'm really puzzled about, is how the tax thing works. If I'm 15, do i have to pay tax, and if i can't legally post my game on steam because i'm under 18, what happens if i get one of my parents to enter the tax stuff, do they have to pay tax on a free game? The reason I'm excluding the soundtrack from this is because I was thinking of putting it on my website and selling it there, and posting the link to that on steam, if I did that and made nothing from game sales, would that mean that i don't have to pay tax? 

Thanks guys.

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So I don't know what state you live in and there may be state tax laws that apply. My answer is limited only as it applies to how federal tax applies. 

Yes you will have to pay taxes on the money you make from the sales of your soundtrack. Even though you are 15 you can still earn a taxable income(Steam can have its own rules about who can submit games/soundtracks to sell).  I haven't worked with Steam before but almost every other online market place will provide you will tax docs at the end of the year summarizing how much you made. Honestly unless your soundtrack sells like crazy (were talking thousands a month where even a highly successful indie soundtrack might only make a several hundred a month) you probably won't even make enough that you will have to pay taxes.  You must still file your taxes because it is required, just don't worry about some large tax bill. 

And if your parents put their information in for you it is considered income for them. They will have to include it in their tax return.

8 hours ago, dandev said:

would that mean that i don't have to pay tax? 

No. Generally speaking, if you're making money, that's income, and a government will want you to pay income tax.

If you're going to be making money on your own, generally that means that you're operating a business. Generally, this requires you to register your business with the government. The simplest form of business is usually a sole-trader / sole-proprietorship, which makes no legal distinction between the person running the business and the business itself. This business entity will have to declare their income to the government. Generally, you pay an accountant to do the paperwork for this task. You could ask an accountant now to find out how this would work.

There are some loopholes (e.g. hobbies can generate limited income in some places, without being classified as business operations), but I imagine that Steam will want your actual business registration information when you sign the distribution paperwork with them.

It helps if you mention which part of the world you're in.

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