If you’re a YouTuber who lives outside the US, you may have taxes deducted from your US earnings later on this year. If you fail to provide your tax information, Google may be required to deduct 24% of your total earnings worldwide.
Stay tuned throughout the video to understand why YouTube is withholding US taxes from YouTube creators, how this affects creators’ earnings outside the US, how to submit your tax info to Google, and how this will affect your income on YouTube.
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Why is Google doing this?
Google is required to collect taxes from creators that are participating in the YouTube Partner Program. If you remember the YouTube Partner Program, you can generate ad revenue from ads that are being displayed on your YouTube videos. You can also generate revenue from Super Chat, Super Stickers, and Channel Memberships.
If you are a creator that lives outside the US, Google will begin deducting taxes from the earnings you receive from viewers in the US. If you’re a creator that lives in the US, like myself, then you probably already submitted your tax info. Later on, I’ll show you the steps to submit your tax information to Google.
Keep in mind that if your tax information is not submitted to Google by May 31st, 2021, Google may deduct up to 24% of your total worldwide earnings. Man, that really sucks. How do you know if the US tax requirements apply to your country? Every YouTube creator regardless of their location in the world must submit their tax information to Google. If you’re a creator outside the US, withholding rates can be between 0 and 30% based on the earnings you receive from US viewers. It also depends if your country has a treaty relationship with the US. Click the link in the description to find out if your country has a treaty with the US.
For US creators, if you’ve provided valid tax information, Google won’t withhold taxes from your earnings. An important thing to keep in mind is that if you don’t submit any tax information, Google may withhold the maximum tax rate. This will depend on your AdSense account type and the country where you live.
Is there any difference in the tax rate between a business account or an individual account?
The default withholding rate for a business account is 30% of US earnings. If the person to be paid lives outside the US, they’ll be subject to a 24% withholding on their total worldwide earnings. If you have an individual account, 24% of your total earnings worldwide will be withheld. Keep in mind these withholding rates will be adjusted based upon the next payment cycle and after you’ve submitted your tax information.
How will this tax change affect your income?
If you’ve provided valid tax information, only a portion of the earnings you receive from viewers in the US will be withheld as tax. Here is a hypothetical example. If a creator from India earns $1,000 and $100 of that is from US viewers, and he withholds tax information, he has to pay up to 24% of his total earnings worldwide. That means he has to pay $240 out of the $1,000 that he earned. If his country has a treaty with the US and he submits his tax information, his final tax deduction will only be $15. This is because India and the US have a tax treaty relationship which reduces the tax rate to 15% of the earnings for viewers in the US.
The third scenario is where the country doesn’t have a treaty with the US but the person submits their tax information. The final tax deduction will be 30 USD because if a country doesn’t have a tax treaty with the US, the tax rate will be 30% of the earnings of viewers from the US.
How will this affect the income of non-US creators?
- If you don’t submit your tax info and your country doesn’t have a treaty with the US, you’ll pay a higher tax rate.
- You’ll pay a smaller tax rate if your country has a treaty with the US and you submit your tax information.
- If your country doesn’t have a treaty with the US, submit your tax information anyway so you avoid paying a higher tax rate.
Here’s your action step…
Submit your tax information to Google now whether you have a treaty with the US or not so you avoid paying a high tax rate on your US earnings.
Here are the steps to submit your tax info to Google.
- Go to your Google AdSense account at google.com/adsense.
- Click on “Sign in”,
- Click on “Payments”
- Click on “Manage Settings”
- Scroll down to “Payment profile”
- Click the pencil icon that says “United States tax info”
- Click “Manage tax info”.
I’ve already submitted my tax information, but you’ll find a guide that will help you to select the appropriate form for your tax situation.
Let me ask you a question….
Will you be submitting your tax information to Google if you live outside the US?
Post your answer in the comments below. I’d love to read them, and I’m sure others would too.
How can a small creator that’s not in the YouTube Partner Program make more money from YouTube now that YouTube is deducting more of their worldwide tax earnings?
Watch this video to learn how to monetize YouTube videos without 4,000 watch hours and 1,000 subscribers.
Click here to get The One Blueprint That Gives You Step-By-Step
Instructions On How To Grow A Profitable YouTube Channel
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