by Ruth Belena

Created on: August 15, 2009

Citizen journalists need to be aware of the taxation implications of making money writing at websites such as Helium. Regular writers, and those with many articles at Helium, can earn thousands of dollars in a year and might be required to pay tax on some of their writing income.

Taxes have to be paid by anyone earning more than the minimum tax-free allowance. In the USA up to $600 can be earned within a calendar year before tax, but personal income tax varies from state to state. Local and national legislation decides how much each individual members has to pay, and citizen journalists are responsible for their own taxation within their own state or country of residence.

If a citizen journalist earns less than the tax threshold at one website, but has from several different sources or other employment, the amount earned from writing could be taxable when added into annual income. Some websites are required by law to collect tax information from those who participate in their earnings program. Citizen journalists may be asked for a Social Security number, or some form of identification, when they initially sign up.

Helium is a US corporation, and is legally required to provide the IRS with information about Americans who make more than $600 in a year. Helium does not have to do this for individual members in other countries. Americans receive an email with a form attached for downloading. A signature is required and the form has to be returned by mail. Young American citizen journalists, below the age of 18, might need the signature of a parent or guardian.

Citizen journalists are generally considered to be independent contractors or self-employed workers, and once they have earned more than the specified minimum amount, they have to file their own earnings information for tax purposes. Exemptions and allowances are regulated by government legislation.Tax advisors can give more specific guidance. Accountants and financial experts can help to reduce tax bills.

Self employed people are allowed to claim deductions for business expenses, and this is best done with the guidance of a tax expert, advisor or accountant. A citizen journalist could be able to deduct hundred dollars from taxable earnings in self employment, by claiming for equipment, stationery, electricity and workspace.

Accountants will probably not consider anything to be actual income until it has been paid into a PayPal account, or payment has been made by another method. Income from Helium can be backed up by PayPal statements, and earnings from a Helium account are paid out around the same date each month, provided a payment request has been made. This means that earnings showing in an online account in December can be actually paid out in January.

It is important for citizen journalists to keep track of all writing income, because wherever they live they are required to pay tax on a proportion of income. There are taxation implications for anyone who earns money from websites that pay for content, whether this is passive income from ad revenue and page views, payments for articles sold or upfront payments.

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