Hi folks, I currently start to make some small money online (affiliates, adsense....). Right now my portfolio websites yield around $20 to $50 per month. My question is - Given the fact that I dont make much money online, can I create a corporate and push the revenues under it so that I can claim some fees (like internet fees, $100 for my laptop...). If yes, what kind of corporation do u recommend ? (C, S...) Thank you PS
Your only option would be an "S" corporation out of "S" and "C". "C" would be a much bigger company with many employees. If you are only making $20-50 per month, you would be better off with a sole proprietor more than likely unless you have alot of liability issues. You would eat up your whole year's income in setting up a corporation, filing annual fees, and complying with other requirements such as having a registered agent (if required in your state). I believe the current IRS minimum self employment income is $400. You may not need to do anything at all. Call the irs.
wow. I can't believe you made a thread about paying taxes when you make a whopping 50$ a month. You don't have to pay taxes unless you make 20+K A year. The government doesn't care if you don't file your earnings if you don't make any money. Organizing as a corporation costs a lot of money. Paperwork + Chartering costs. It'll cost you more than 50$ A month just to be organized as a corporation. Yes theres a fee.
Thanks for all the answers. The reason why i was asking because I want to take off my expenses like : fees for Godaddy, internet... I guess I would wait until I can hit aroun $400/ month. Very long run to go though. Btw, I dont expect to hit the target before couple of years
Giving advice to not pay taxes on less than $20K a year is very bad advice and completely inaccurate: http://www.irs.gov/businesses/small/article/0,,id=98846,00.html#4
Hi! I'm an Enrolled Agent with 20 years experience preparing taxes so I think I am qualified to answer your question! You do not need to have a corporation to deduct your expenses. At this point in the game, all a corp is going to do is eat up more of your money. You are required to file a tax return if your gross self-employment income is over $400 per year. So, even if you don't make very much money you have to report it to the IRS. As a sole proprieter you will report your income and deduct your expenses on a schedule C. You will also need to calculate your self-employment tax on schedule SE. There are lots of rules about how to deduct expenses so you need to find a qualified tax person in your area, or do lots of reading at at the IRS website. The site won't let me post a link yet, so you will have to type in www(dot)irs(dot)gov Good luck!