Here's how fuct business taxes can be - Just watched a story about a man in my country (poland) that runs a bakery. Every night, the stuff that he didn't sell and couldn't keep, he would give away to the homeless - seen as a community leader and great helper...... You'd think the government would applaud such a gesture - instead he got hit with having to pay taxes that he would have generated on every single loaf he handed out - wiped out his whole business. Don't fcuk with your taxes people, no matter what you do with the money. Where there is money, there is a trail - if you are worried about generating over $600 for the year you're probably going to be ok no matter what you do. If you generate anything over 30K, make sure you're not blowing it, and if you're a 6 figure earner, you should be keeping every red cent for the first few years to see how you panout with your creative accounting before buying your dream car/home/toy. Taxation is indeed corrupt, here is a great flick by russo about how tax is actually NOT a law in the states, and was radified by a majority of the states - not saying you shouldn't pay it, but this is a great docudrama of how tax works and how it rapes you - Freedom To Fascism - http://video.google.com/videoplay?docid=-1656880303867390173 Enjoy. N.
I am an affiliate from Canada, most of my sales are from clickbank..Do I need to file for GST / PST on affiliate income from clickbank ....does clickbank take this automatically from the customer during the purchase process ??? can anyone pls help
How does my wife prove that she is the one earning the additional income as a 20% taxpayer rather than her husband who is a 40% taxpayer? JZ
Wow I am estimating to make over $50,000 this year, far more than I have ever made. So this tax shit is really going to hit me hard. I believe over $50,000 puts me in the 30% tax bracket? Atleast I have a couple grand in adwords to write off lol but still. 30% WTF!!! I see the government construction workers, and city workers slacking ALL the time. They have 2-3 guys directing residential street traffic. I have never paid any serious taxes and I am already pissed lol!
I live in Florida, and according to the 16th Amendment information on Wikipedia, Florida rejected it; does that mean I don't have to pay taxes?
Taxes in the US are paid on your adjusted gross income. From your gross you are allowed to deduct ordinary and necessary business expenses. And then your personal deductions and any itemized deductions are deducted from your adjusted gross income. It may not be as bad as you think but it isn't going to be fun.
Sorry for bringing up an old thread, but doing a search it is the only one I found on the subject here. (Please share other threads that apply if you find them!). I just got a letter from the IRS (in US) stating I owe a SE tax from my Adsense earnings. Plus interest on what I owe. Yes, I reported the income. This is from 2007. I expect to receive a similar notice for 2008 soon. Yes, US citizens owe 15.3% on Adsense and/or Clickbank, Commission Junction.... earnings over $400 as a self-employment tax. Guess I better start getting together receipts for expenses and consider incorporating as well....
There is a great Tax Book, published by a CPA for small businesses and home based businesses. It is very thorough and complete. It's well worth it. I have used much of the knowledge in this book with my businesses for several years now. I have been self-employed full time for 15 years. The forum rules don't allow me to place my referral link in the body and I have not been a member long enough to place it in a signature. So, you know what to do, if you want details, I'm sure. Incorporating may or may not be your best option. Do some research for advantages and disadvantages for entities, based on your business and your long term goals. I'm not an attorney; but I'm very experienced with business entities and I can relay my experience without giving legal advice. My C-Corp provides more tax benefits and structuring than a sole proprietorship. I have partnerships that serve specific business purposes and my C-Corp is one of my partners. There are great strategies with different entities. Check with a local attorney who "SPECIALIZES" in entity structuring. General practice attorneys can set up any entity; but may not have the at hand experience knowledge to give you the best job for your money. (Just like Doctors - a specialist will handle specific needs). Good business and much success to you.
If you start making a sizable amount of money you do not want to wait until the end of the year to pay the taxes, you could be in for a very big and unpleasant surprise. Being self employed (which you are unless you're incorporated or have a business structure other than proprietorship) along with Social Security and Medicare tax you also have to pay Federal Income tax, State tax and Unemployment Compensation tax plus any local or city tax if applicable. You don't need to hire a CPA, their fees are high. A good accountant will do but don't forget, they cost money too. I keep one on retainer throughout the year, I pay her a monthly fee making it easier to manage and along with doing my corporate and personal taxes at the end of the year she also does my payroll. I do affiliate marketing full time, the same thing you are doing.
If you live in the US and you're making money you are self employed (Proprietorship) regardless of how you make your money (affiliate marketing, lemonade stand, etc) unless you have another business structure such as an S Corp or LLC, then you're an employee of that company and the tax is spit (your employer matches 7.65% for you), otherwise you will be liable for self employment tax. For self employed the Social Security tax rate is 12.4 percent on the first $106,800 and your Medicare tax is 2.9 percent for 2009 and they don't want to wait until the end of the year to get it all either. If you think you're going to make a decent amount of money talk to an accountant (you don't need to pay a CPA) EARLY in the year this coming year so you can pay your taxes throughout the year, that's what the IRS expects and it’ll work out better for you too. State and Unemployment Compensation taxes (yeah, you have to pay UC too) are sent in quarterly and don’t forget Federal Income tax too which the IRS likes to get on a monthly basis from businesses and factor in any local or city tax if applicable. Anything you buy or payout for the business can be deducted but not necessarily 100%. If you buy a new computer and the family shares it don't expect to claim 100% of it for the business. Same goes with Internet connection and phone, if the family uses it too you’ll have to come up with a reasonable percentage of business use for your deduction(s). Any expenses for the business such as click costs, web hosting, domain name fees, etc are a 100% write off regardless of business structure. Same with any office supplies you buy for the business (stamps, staples, paper clips, etc) so keep your receipts. For click costs, web hosting, domain name fees use a debit or credit card and the posting on your bank statement can serve as your receipt, it saves on work. If you really start making a decent amount of money consider incorporating (S Corp) and have an accountant do your payroll too. As a corporation you can also pay yourself a percentage as dividends instead of salary and avoid the SSI and Medicare taxes on the percentage paid out as dividends. It sounds like a lot of money and work at first but in the end it's worth it and it will keep you out of debt plus being the CEO of your own corporation has a nice little ring to it. Clickbank fees aren't “money out of pocket†expenses so there's no deduction there, same with refunds. You only claim deductions on money that you actually collected then had to pay out or put back into the business afterwards for business expenses or expansion, upgrades...
And what do you think adding a corp would do to solve your problems? Not much I would guess. All it would do is create another dozen forms to file. New readers to this thread should note that a $50 tax software program would help you avoid this problem if you don't use a CPA.