Spliting Google Adsense revenue between webmasters (A tax Question)

We split google adsense ads 50/50. The google ads are held on my tax info, is their anyway that at the end of the year when taxes are due, that I can send in what I made off of the ads (My 50%) Then the other webmaster records his half (His 50%)? That way I will only get taxed on what I made instead of what we both made together, then he still gets half?

 

I am NOT a tax expert. I assume Google is writting one cheque to you right? So an auditor would follow the money from google to you, and then ask you why you only reported 50%.

The simplest think to do would be to have the other web master invoice you for his half. Then his half shows as an expense to you and as revenue to him. This way each of you can account for your revenue and you only pay tax on your 50%.

I am NOT a Tax specialist. In fact I hate taxes, not paying them, just doing them. Actually come to think of it, I find all book keeping a giant waste of my time

 

I don't know if it is possible...this could be a big deal if you don't get it taken care of now...I would find a tax expert right away.

 

Why doesn't your friend apply for an adsense account himself if possible?

Then you create something on your site that does a 50/50 on displaying ads, and you are done...

 

It doesn't make sense to have 2 AS accounts for the same website... that is if I'm right in assuming that they're webmasters for the same site (or network of sites). Plus, I'm not sure but it probably violates TOS to have 2 accounts for the same site.

 

the best way or easiest way - use a revenue sharing hack and each of you have your own adsense account.

 

I think the first idea was the best one. Make him invoice you for 50%. You get 100% and the Google thing is just okay, then pay his 50% due to his invoice, and overall your taxes will be like you want them to be.

 

It is not against the TOS to have more then one account on one website, this forum is an example.

They ask to just use on account on one page, thats all.

 

Many sites rotate different publishers numbers through pages to overcome the problem you're talking about.

 

it is against the TOS to have 2 adsense accounts or 2 different publisher codes on the same page. But there is NO problem with rotating your Ids as long as they never appear at the same time basically. Adsense can also be put on as many sites as you like - as long as they are acceptable by Google (you do not need permission).

 

You have two options - 1) incorporate or form a small business with 50% ownership. With an S Corp the income will flow to your personal taxes according to ownership share. With a C Corp you'll run into a double taxation situation you will want to avoid. Small Biz or Partnership might be the way to go. or 2) Have him invoice you and 1099 him for the expense.

 

Wow I'm not sure what to do or what would be easiest. Those are both great ideals and I personally love the invoicing part, that would give us the chance to split it a true 50/50. The 2nd one with the rotating scripts, I like that as well, but it may be a little more work trying to figure out how to make them rotate and the profit wouldn't be exactly 50/50, but its still a good ideal.

 

Whats the 1099 him for the expense do?

 

The IRS form 1099 tells IRS the amount of money that you are paying to him. He gives you an invoice - you pay the invoice (an expense for you) - you report the amount that you pay him on the 1099 (which is reported to IRS). You are deducting the amount you pay him, so he pays taxes on that amount and you do not have to pay taxes on the amount.

You definately want to make sure that you check this out with a tax consultant, otherwise you can have some big surprises at the end of the year.

Reviewing which type of tax entity is best for you is also important. Sole proprietor vs corporation. If you choose a corporate entity, is C corporation or S corporation better, or possibly going the route of Limited Liability Company. It all boils down to DO YOUR HOMEWORK. If you are not making a lot with Adsense now - still do the research - that way you will be prepared for when your Adsense income increases.

 

For good information on starting or running a business in the United States, go to www.irs.gov. Lots of good information on starting a business, getting an EIN , small business/self-employed, corporations. There are publications you can either order or download. It is good to go over some of this on your own, then you might want to check with the tax consultant to review the information to verify you have a correct understanding of it. Make sure you are paying your quarterly estimated taxes, if you do not you can be subject to some hefty penalties at the end of the year.