Play games to get paid

[Icekitties]

For the apps like misfit where you get paid for playing games. Do we get tax on it even if you didn't make much while working part time on top of it? If it does get taxes on it, is there anyway to pay for taxes online instead of waiting til tax time knowing that may owe money. 

[Vanessa A]

Yes.  if you are getting paid to play games, then this income would be taxed.  If you are doing this as a side job, then this would be subject to Self-Employment Tax.

You can make payments to cover your taxes directly on the IRS website. Your self-employment taxes are 15.3% of what you earn.  Then you also have your regular ordinary income taxes and don't forget your state and local.  You can generally pay on their websites as well.

And yes, you should make payments as you go throughout the year so you do not get a penalty for underpayment. 

[Icekitties]

For 15.3% (.153) self employed tax, this is every week when we do cash out from PayPal? (I know its every platform there are to get paid to pay out while I only do paypal) Is the 15.3% also includes other taxes beside federal that you mentioned?

[Vanessa A]

No.  The 15.3% is ONLY the FICA taxes.  This is your social security and medicare taxes.  If you work for someone, your employer pays half, while you pay the other half.  When self-employed, you pay the entire amount.

Then you have to pay your ordinary income taxes or federal taxes.  This is based on your tax bracket.  

You only need to make the payments quarterly, not each time you get paid.  They are generally due on the 15th day of the month following each quarter (April, June, September and January) 

A Guide to Paying Quarterly Taxes

[Icekitties]

Hopefully last few questions, federal would be easy to figure out since it would be 10%.  For FICA (15.3%) , is that goes to state taxes under state (ri) taxation as estimated taxes for se 1040? If so, is it the same one I use to do state taxes too? Which means if FICA and state taxes are all in one as estimated taxes to pay all at once to do se 1040? At least do know for state tax is 3.75%

[Opus 17]

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@Icekitties wrote:

Hopefully last few questions, federal would be easy to figure out since it would be 10%.  For FICA (15.3%) , is that goes to state taxes under state (ri) taxation as estimated taxes for se 1040? If so, is it the same one I use to do state taxes too? Which means if FICA and state taxes are all in one as estimated taxes to pay all at once to do se 1040? At least do know for state tax is 3.75%

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I feel there are some things missing here.

You file one tax return for the whole year that reports ALL your income, deductions and credits and calculates your tax.  You must report this income on your tax return with all your other income.  While you may (and maybe should) make estimated payments during the year, that does not substitute for including this income on your tax return.  You must report all your income to calculate the tax owed.  You also get credit for all your payments.  If you overpaid, you get a refund.  

We have not discussed whether this should be reported as a hobby or business.  Hobby income is subject to income tax but not the 15% self-employment tax, but you can't deduct business expenses (if you have any).  Business income is subject to both income tax and self-employment tax, but you are allowed to deduct ordinary and necessary business expenses if you have them.  The factors used to tell if your activity is a hobby or business are listed here.

https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax...

Very briefly, if you engage in the activity regularly in a businesslike manner, intend to make a profit, actually make a profit, and rely on the funds for living, that tends to show it is a business.  If you do the activity primarily for recreation, and you have enough money from other sources to pay living expenses, that tends to show it is more likely a hobby.

If the tax on your income will be more than $1000, you need to make estimated tax payments.  You should make estimated payments even if your tax will be less, because it will help you avoid penalties, and if you pay too much, you will get it back as your refund.

You make one estimated payment (per quarter) to the IRS that includes both self-employment tax and income tax.  If this is a business, the SE tax part of the estimated payment should be 15% of net profit (that's close enough).   The income tax part could be anywhere from zero to 36% tax, depending on your other income, deductions and dependents.  We can't guess without knowing more about you.   If it is a hobby, there is no SE tax component.  So the final estimated payment could be anywhere between zero and 45%.  

Estimated payments for state income tax are paid separately, directly to the state.  The Rhode Island portal for making estimated income tax payments is here.

https://tax.ri.gov/online-services/make-payment-online

[Icekitties]

Good to know that theres 2 different kind! Actually, its a hobby as a side gig and not business. And I rather pay estimated taxes quarterly if needed to, so that i don't owe taxes at the end. If don't pay 15% as self employed, how can i find out the taxes for federal, fica and the state? Unless the federal goes by tax bracket which again is easy to figure out and the state is 3.75% since it's under $76,000

[Opus 17]

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@Icekitties wrote:

Good to know that theres 2 different kind! Actually, its a hobby as a side gig and not business. And I rather pay estimated taxes quarterly if needed to, so that i don't owe taxes at the end. If don't pay 15% as self employed, how can i find out the taxes for federal, fica and the state? Unless the federal goes by tax bracket which again is easy to figure out and the state is 3.75% since it's under $76,000

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If the state has a flat rate then it has a flat rate, easy enough.

For federal, you can try this calculator.  

https://www.irs.gov/individuals/tax-withholding-estimator

(If you already get a refund, and depending on the amount you actually earn, you might not need to pay estimates at all if the refund will cover it.)

Federal tax brackets are here.  Remember that is for your taxable income, so you start by subtracting your itemized or standard deduction.  And this does not account for the dependent credit, which has a significant effect on your rates as well.

https://www.forbes.com/sites/kellyphillipserb/2024/10/22/irs-announces-2025-tax-brackets-standard-de...