Results 1 to 14 of 14
  1. #1
    Newbie
    Join Date
    January 18th, 2005
    Posts
    511
    Hi, A few questions for those familir with taxes and affiliate business.

    Im wondering at what point do you think a person should be putting money aside out of their affiliate checks towards tax time?

    I have heard of some affiliates earning $3,000-6000 a month and not declaring any taxes.. just keeping and spending it all? how can they get away with that?

    How much should you be putting aside per month?

    Lastly, Other than the known things like advertising, templates, hosting, domains, what else can an affiliate business write off and should be keeping receipts for if they are working out of a spare room and earning a disgusting amount of money?

    thanks...

  2. #2
    ABW Ambassador
    Join Date
    January 18th, 2005
    Location
    Nunya, Business
    Posts
    23,684
    http://abw.infopop.cc/eve/ubb.x?a=se...reqWords=taxes

    "I have heard of some affiliates earning $3,000-6000 a month and not declaring any taxes.. just keeping and spending it all? how can they get away with that?"

    I don't think inmates pay taxes, not sure

  3. #3
    Mama in Charge Anne's Avatar
    Join Date
    January 18th, 2005
    Location
    Virginia
    Posts
    2,780
    I think once you hit $600 a YEAR in the US you pay taxes. I have been paying quarterly for ages. I hate paying but I would hate jail worse, LOL!

  4. #4
    ABW Ambassador
    Join Date
    January 18th, 2005
    Posts
    737
    If you earn $600 from a company, then they are supposed to send you (and the IRS) a W-2 in January. Some companies make you fill out a W-9 right away, and then if you hit the $600 they can easily send you the W-2 later.

    There is a % of withholding (I think 90%) that you have to pay of your prior years tax in order to not make estimates. However, if you don't make estimates, you may wind up with a tax penalty, and/or a big tax bill come April. You can also decrease your tax liability by opening a SEP plan which is basically an IRA for self employed people.

    If you're a saver, then come tax time you'll be ok. If not, then you may be in trouble. Earnings up to 89k are subject to social security. So you pay your share and the (employer share, since technically that's you) and that's like 7.5% x 2 = 15%, then the Self Employment Tax, State Tax, and Federal Tax. You can end up paying up to 40% of your self employment income to taxes and such.

    Deductions..if you buy a new computer, deduct that. Also, your hosting fees, modem fees, etc. The best advice I can give you, is to check with an accountant.

    Good luck,
    Robin

  5. #5
    Newbie
    Join Date
    January 18th, 2005
    Posts
    511
    I heard that some affiliates will INCORPORATE their business and that has some advantages, plus some will also if they are in canada will setup shop down in nevada or delaware as apparently those states hold tax advantages, anyone know more about this?

    I heard this through james martell.

  6. #6
    ABW Ambassador
    Join Date
    January 18th, 2005
    Location
    England
    Posts
    4,327
    Talk to an accountant. That is the ONLY advice that you should need

  7. #7
    I like traffic lights
    Join Date
    January 18th, 2005
    Location
    Southern hemisphere - away from Fukushima
    Posts
    2,936
    >how can they get away with that?

    The real question is how LONG can they get away with that.

    I agree - talk to an accountant.

    If you've been making money and haven't declared it as income, you're already in trouble.

  8. #8
    Internet Cowboy
    Join Date
    January 18th, 2005
    Posts
    4,662
    Figure 1/3 of what you bring in will go to taxes, if you are making enough here to make a living.


  9. #9
    More Cheesier Than Ever Cheesehead's Avatar
    Join Date
    January 18th, 2005
    Location
    Land of The NFL Champs!
    Posts
    2,942
    Get a tax accountant!!!!

    I went with one last year and he not only did my taxes correct, he found stuff from previous years to get me back an extra $600 I wouldn't have had.

    If this is a second income, you should look at pre-tax retirement plans of your day job to offset extra income. You will still have to pay self-employment tax however so keep that approximate figure in mind - your tax accountant can help with this also.
    This World is Not My Home
    We're gonna go inside, we're gonna go outside, inside and outside. . . And then we're gonna go go go and we're not gonna stop til we get across that goalline! Quotes from the movie Rudy, 1993

  10. #10
    Kung Fu Master Eathan's Avatar
    Join Date
    January 18th, 2005
    Posts
    1,833
    Again, go see an accountant.

    I'd suggest putting 30-40% away in a separate account, just for taxes. Don't touch it, don't look at it and certainly don't get attached to it.

    Also, make your quarterly payments. I failed to do estimated last year and got hit with a tax bill bigger than the down payment on our house, quickly followed by Q1 estimates a month later. That sucked.

    My wife and I incorporated this year and TALKED TO AN ACCOUNTANT. It turns out there are a bunch of write offs we would've never thought of. Household furniture converted to business use, for example...

    We've even started keeping a journal of mileage driven on business related trips. At $.36 cents a mile or whatever, and an average round trip of 50 miles, it adds up!

    Good luck!
    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

  11. #11
    Newbie
    Join Date
    January 18th, 2005
    Posts
    511
    Yeah i have setup with an accountant.. i just hope she understand affiliate business and the point of incorporating, as I heard that has its advantages..


    I also heard if your canadian getting incorporated down in states has its advantages

  12. #12
    Member
    Join Date
    January 18th, 2005
    Posts
    84
    Set aside enough money to pay your quarterly payments to the IRS. Don't mess with the IRS. I use Turbotax with Schedule C for my affiliate income and expenses. Piece of cake. Even file electronically.

  13. #13
    http and a telephoto
    Join Date
    January 18th, 2005
    Location
    NYC
    Posts
    17,708
    Canada has different rules than the US does, don't take ANY of our word for what you need to do, you need to check on YOUR OWN COUNTRY'S RULES.

    This is dangerous territory folks....
    Deborah Carney
    TeamLoxly.com BookGoodies.com ABCsPlus.com

  14. #14
    I like traffic lights
    Join Date
    January 18th, 2005
    Location
    Southern hemisphere - away from Fukushima
    Posts
    2,936
    >I also heard if your canadian getting
    >incorporated down in states has its advantages

    You want to end up paying tax in TWO countries?

    Once you start paying tax to the USA, they want to own you for life. Green card holders, even if their card has expired and they have gone back to their original country, and are only earning money back there, are still liable for US tax on that income.

  15. Newsletter Signup

+ Reply to Thread

Similar Threads

  1. [CJ] HansenWholesale.com: Get free shipping and pay no taxes
    By Angely in forum AffiliateManager.com
    Replies: 0
    Last Post: April 17th, 2012, 10:12 AM
  2. Replies: 3
    Last Post: December 2nd, 2008, 10:59 AM
  3. W-8ben - does it mean I am not going to pay any taxes?
    By getrollins in forum Business & Legal Issues
    Replies: 1
    Last Post: July 15th, 2007, 07:05 PM
  4. Here Comes The TAX Man!
    By mailman in forum Midnight Cafe'
    Replies: 2
    Last Post: February 16th, 2007, 04:37 PM
  5. Taxes is anyone going to get a tax refund for 2003?
    By jc101 in forum Midnight Cafe'
    Replies: 9
    Last Post: March 22nd, 2004, 12:48 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •