I have a friend that owns several get paid to sites. He pays money out to his members each week for visiting advertisers webites, taking surveys and signups, and posting on forums. My question is, are these payments that are made to these members considered deductions? And if so, how do you classify them on your taxes. Does it have to fit into a category or what? Also, when this person reports their taxes, or they required to fill out a Schedule C for this, or do they just need to document the total amount received, total amount deducted and total profit? I am not well versed in tax law, so I cannot help my friend out and wanted some expert opinions. This person also has a hosting website, reseller site, domain store and other sites and was wanting to know what he needs to do for taxes as he also has two w2s to claim. Any help or suggestions would be greatly appreciated, please let me know if you need any more info, Thanks
I appreciate the response, but he is actually from the US. If you have any tips or ideas I would love to hear them, Thanks
Generally, all countries have a slightly different laws. If money are quite significant, just go to visit nearest accountant and consult with them, but if you are talking about hundred a month - forget about this.
Thanks for the responses, what I need to know is, Are payments made to members for visiting sites, taking surveys and offers, posting on forums etc. considered a valid deduction, and if so, how do you classify it on your taxes? Any input is greatly appreciated. Thanks
From my tax rep, I was told basically anything I spend in the process to make money (within reason) is considered a tax deduction. Would your business be able to continue if you were not paying out to the members? That's how I see it. PS: I AM NOT A LAWYER!
Depending on how much he pays out yearly to his members, he may need to issue a 1099 for persons to whom he sent money.
What is the limit for this, do you know? Isn't it over $600 or something to one person in order to have to do this?