Should I file taxes or Incorperate a personal project?
Normally, incorporation is for liability reasons.  Just file your taxes as a business.  This just means adding a T2125 to your personal return.  There's no registering, that's for GST if over a certain threshold. There's even a section in the instructions for internet businesses. http://www.cra-arc.gc.ca/E/pub/tg/t4002/t4002-e.html#internet_business_activities This is the form you have to fill out.  Take note that there is a place to include costs from using your own home as well.  Those specific expenses can't be used to create or increase a loss from your business, but a regular business loss can be deducted from your employment income. http://www.cra-arc.gc.ca/E/pbg/tf/t2125/t2125-15e.pdf "I don't know what you mean by ""claim for taxes,"" I think you mean pay taxes.   I'm not sure how corps function in Canada but in the US single owner limited liability entities typically pass the net income through to the owner to be included in their personal tax return.   So it seems all of this is more or less moot, because really you should probably already be including your income sourced from this project on your personal taxes and that's not really likely to change if you formed something more formal.  The formal business arrangements really exist to limit the liability of the business spilling over in to the owner's assets.  Or trouble in the owner's life spilling over to interrupt the business operation.  I don't know what kind of business this is, but it may make sense to set up one of the limited liability arrangements to ensure that business liability doesn't automatically mean personal liability. A sole proprietorship or in the US we have DBA (doing business as) paperwork will get you a separate tax id number, which may be beneficial if you ever have to provide a tax ID and don't want to use your individual ID; but this won't limit your liability the way incorporating does." There are two reasons for incorporating a business in Canada - limiting liability and providing some freedom in structuring your taxes. Since you are asking about taxes, I will restrict myself to that topic. First of all, remember that if you don't make much money, there isn't much tax to save by clever structuring of your affairs. And if you do incorporate, you will pay taxes as a corporation, and pay taxes again on your salary paid from that corporation. It can still be advantageous, because the small business tax rate is less that the higher tax brackets of personal taxes, and you don't have to pay out all of the profit as salary. If you don't incorporate, you still must pay taxes on your net income from the business. (See brian's answer.) Definitely keep track of your income and expenses, even if you don't plan on making money, in case you get audited. If the CRA wants to call your hobby a business, you will need to show that you haven't made any profit. I am just giving you a few bits of advice because this subject is complicated. Too complicated for an answer on this site. If you are still interested, go to your local library and get some books on the subject.
"I assume you are filing US taxes because you are a US citizen, resident alien, or other ""US person"". If you have a total of $10,000 or more in assets in non-US accounts, you are required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts, also known as FBAR, to report those accounts.  See Comparison of Form 8938 and FBAR Requirements.  Note this refers to the total balance in the account (combined with any other accounts you may have); the amount you transferred this year is not relevant.  Also note that the FBAR is filed separately from your income tax return (it does not go to the IRS), though if you have over $50,000 in offshore assets you may also have to file IRS Form 8938. Simply reporting those accounts does not necessarily mean you will owe extra taxes.  Most US taxes are based on income, not assets. According to the page linked, the maximum penalty for a ""willful"" failure to report such accounts is a fine of $100,000 or 50% of the assets in question, whichever is greater, in addition to possible criminal sanctions. There may be other US filing requirements that I don't know about, so you may want to consult a tax professional.  I do not know anything about your filing requirements under Indian law." "1099's and other official tax forms are often reported to the IRS by the issuer, whether or not you include a copy in your return. You should not neglect to include this income in your 2016 return in an attempt to balance out the two tax years. It's up to you whether or not you feel like filing an amended 2015 return to recover over-payment of taxes from that tax year. You have up to three years to amend tax returns using form 1040X. Since you couldn't have furnished a 1099 for this when you filed your 2015 return (otherwise you wouldn't be in receipt of it for tax year 2016), I'm assuming you reported it simply as ""Other Income"" and therefore would have been [over] taxed your marginal rate on it. From irs.gov: When to amend a return.  You should file an amended return if you need to correct your filing status, number of dependents, total income, tax deductions or tax credits. The instructions for Form 1040X, Amended U.S. Individual Income Tax Return, list additional reasons to amend a return." Are these PFIC rules new? No, PFIC rules are not new, they've been around for a very long time. what would that mean if a person owned a non-US company stock, like a   company in Europe that makes chocolate? Is that considered assets that   produces passive income? No. But if a person owned a non-US company stock like a company that holds a company that makes chocolate - that would be passive income. this is non-US mutual funds that hold foreign shares, like a mutual fund in India, not a US fund which owns Indian stocks? Non-US fund. For those of you who are tax advisors, is the time length (30 hours)   true for filing form 8621? I would suggest not to fill this form on your own. Find a tax adviser specializing on providing services to expats, and have her do this. 30 hours for a person who has never dealt with taxes on this level before is probably not enough to learn all about PFIC, the real number is closer to 300 hours. While ZeroHedge article may be a sales pitch, PFIC rules should frighten you if they apply to your investments. Do not take them lightly, as penalties are steep and if you don't plan ahead you may end up paying way too much taxes than you could have. "By living in Sweden and having a Swedish personal identification number (personnummer), you are required to declare your entire worldwide income for tax purposes with the Swedish tax authorities, Skatteverket. It would seem to not make any difference if some of that income is kept outside of Sweden. A company that has no permanent base of operations within Sweden should not deduct any preliminary taxes for an employee that lives in Sweden. Rather, the employee should apply for ""special A tax"" (""SA"" tax status), and pay the taxes that, had the company had a permanent base of operations in Sweden, the company would have paid. The information available on the tax authority's web site in English seems limited, but the relevant page in Swedish in your situation is very likely Lön från utländska arbetsgivare utan fast driftställe i Sverige. There is a summary at Paying taxes – for individuals. Particularly do note the summary section: When staying for at least six months, you are considered as resident in Sweden for tax purposes, and are liable for taxation in Sweden on all of your worldwide income. You must also file a Swedish income tax return. Your tax return must be filed no later than May 2nd of the year after the fiscal year. as well as that: If you stay in Sweden for a continuous period of at least six months you are considered to be resident in Sweden. /.../ As a resident you are liable for taxation in Sweden on all of your worldwide income. In some cases a tax treaty with with your ordinary country of residence  may limit the Swedish taxation. /.../ For a more detailed answer, including which exact forms you need to fill out and what data is needed, I strongly recommend that you either contact Skatteverket (they are usually quite nice to deal with, and they tend to realize that everyone benefits from getting the tax paperwork and payments right from the beginning), or find an attorney specializing in Swedish tax law. They even point out themselves that (my emphasis): the practical applications of these rules are relatively complicated and for more information you can contact the Tax Information (“Skatteupplysningen”) at 0771 567 567." "Earned income is what your software is doing, so it is taxable.  So you can't really make it tax exempt. You can form a business and claim the revenues from that business as income and deduct expenses it costs you to earn that revenue.  If you buy a server to run your software, then that is an acceptable expense to deduct from your revenues.  Others can be more questionable and the best thing to do is to consult a CPA.   If you are still in the testing stage and the revenues will be small then it should not matter.  Worry about the important things, not if you paid the IRS a few hundred to much. Are you in a state/country that allows online gambling?  In most states here in the US you are operating on shaky legal ground.  Before ""Black Friday"" I used to earn a nice part-time income playing online poker." First - get a professional tax consultation with a NY-licensed CPA or EA. At what point do I need to worry about collecting sales taxes for the city and state of New York? Generally, from the beginning. See here for more information on NYS sales tax.  At what point do I need to worry about record-keeping to report the income on my own taxes? From the beginning. Even before that, since you need the records to calculate the costs of production and expenses. I suggest starting recording everything, as soon as possible. What sort of business structures should I research if I want to   formalize this as less of a hobby and more of a business? You don't have to have a business structure, you can do it as a sole proprietor. If you're doing it for-profit - I suggest treating it as a business, and reporting it on your taxes as a business (Schedule C), so that you could deduct the initial losses. But the tax authorities don't like business that keep losing money, so if you're not expecting any profit in the next 3-4 years - keep it reported as a hobby (Misc income). Talk to a licensed tax professional about the differences in tax treatment and reporting. You will still be taxed on your income, and will still be liable for sales tax, whether you treat it as a hobby or as a business. Official business (for-profit activity) will require additional licenses and fees, hobby (not-for-profit activity) might not. Check with the local authorities (city/county/State). I prefer TaxAct. I find it simpler to use and more helpful in helping answer the questionnaire. I have a fairly complex tax return and it handles it just fine. "I would suggest you pay quarterly. Or, if you prefer, do the extra withholding. Don't wait until the end of the year. My experience is that of having a day job with freelance work on the side. I've spent a few years just freelancing, and I paid quarterly as requested to avoid the penalties. Now that I have a good day job again, my freelancing is just a small part of my income, and so I end up with a net return and no longer have to pay quarterly. You shouldn't wait until the end of the year to pay. This is assuming your wife is bringing in a decent income. The only scenario where you would want to wait is if her income is only a small amount (such as my wife's plans for an Etsy store). To the IRS, it doesn't really make a difference whether you withhold extra or pay quarterly. Of those two choices, my preference is to pay quarterly - it's easy to set up calendar reminders on the quarterly payment dates, which are always the same. I did the same as bstpierre when estimating my payments: just take last year's tax (for the business) and divide by 4 (adjusting for any obvious situational differences). That's usually close enough. Paying quarterly instead of via withholding means you get to hold on to your money (on average) for 6 weeks longer. Granted, that doesn't mean much with today's interest rates, but it's something. You may prefer the simpler accounting for withholding, though - you can ""set and forget""."