I’m finding alot of conflicting information on this. Does anyone know how this works? Do you have to pay taxes on iOS app store sales? Or even the Google App store?
BTW, I am in the US so I am talking about US laws.
If it is a method of income, you have to pay taxes on it.
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Yes, you do. You have to pay taxes on what you earn.
Unfortunately there are no loopholes in the tax laws that say income on the App Store doesn’t count. 
–Eric
nice to hear!
Depends on how much money you make. If you make less than $9,750 (in the US), and are a single adult, you do not need to file taxes.
If you are a child, and your parent claimed a tax credit on you, you do not need to file taxes if you make less than $5,950
See the rules here:
http://www.irs.gov/publications/p501/ar02.html
There’s a lot of rules and exceptions. Best read that very carefully.
Note: Since unity does not withhold FICA, you will need to file, but you will likely not need to pay regular income tax.
Where exactly do you claim the income then?
You file a 1040 return. Are you a dependent child? If so, talk to your parents. Otherwise, go get a 1040ez form, and file it. You have until April 15.
Apple etc are collecting part of the tax for you already - use tax or whatever it’s called, since they’re the ones who make the transaction and include tax. But that taxes the customer. Whatever your profit is after that is your own income and therefore is taxable.
So the customer pays a tax on buying, then apple pays a tax on the income, then we pay a tax on our income… what does that add up to, like does that end up with the government getting like half of every dollar spent
Apple only pays income tax on the actual, profitable income from the sale. Assume a one dollar app, 30/70 split, and a 100% profit margin for you and Apple both after the split - and a 10% income tax for both of you (for the sake of ease).
Apple: 30 cents profit - government receives 3 cents in income tax for that sale from Apple
You: 70 cents profit - government receives 7 cents in income tax for that sale from you
They don’t double dip (not in this way at least). It would also be silly to actually file a return with a 100% profit margin - write off your expenses (Unity license, computer hardware, phone/tablet/ipod devices for testing, marketing, $99 apple developer fee, marketing/webpage/repository hosting…).
You file it the same way you file all your taxes. It’s just income - like a job or interest.
The bad part? Apple is no help at all. No 1099, nor end of year summary, nor web page that shows your earnings for the year. Nadda, zip. You must claim it, and you are on your own.
Gigi.
Of course, if you’re serious about it, you’re tracking all this stuff yourself. 
True that. And, it still would be nice if at the end of the year, when we go to file taxes, to have a simple web form we could print. The bank sends one, the pay roll systems send one. Apple could provide one too. Nothing complex, just a ‘Year To Date’ form the accountants could hold in their hand.
Gigi.
I am currently going through the process of registering as a sole trader and starting to pay tax. and il tell you what, being new to the whole thing it is very confusing, but if you get yourself a good chartered accountant then they will do most of the work for you. But yes, back to your question like everyone else has said, you do have to pay tax on your earnings. depending on where you live tho you do get X amount un-taxed income. for me its £10,000 un-taxed income. You still have to claim it tho. Try your best not to earn any money without getting registered, if you do it will come back and bite you in the ass, believe me.
Really? Apple sends no 1099 to you? :shock: mmhmm
Apple doesn’t send a 1099 for App Store sales as they are acting as a merchant, the sales are your responsibility, in other words, they don’t “pay you” they sell your goods and give you the proceeds. On the other hand, if you get iAd income, Apple is paying you for that and you get a 1099 for that revenue.
^^ this.
I would recommend an accountant for any kind of earnings above the “not taxable” bracket of your country. This in general means 9-10k for most countries but you will need to check. Accountants find loopholes and ways to save you money - that is their real job, not just preparing and filing it for you.
If the numbers are big enough, paying to hire an accountant often saves you more money than paying full taxes.
Except, well, if you’re also an accountant.