How detailed do you have to be when stating your income from different affiliate programs and all your business write offs? Do you just basically give a sum total and general categories on your tax form like ex. 10,000 taxable income - 5000 deductions on web hosting and design and domains. Or do you have to state where each individual amount of money came from and the exact money or where each individual business expense was paid for and the exact amount. Or do you just list the total and list the categories you bought? Im getting paid from so many things that it be scary if I had to list all the different things and the exact amounts.
On your actual US return the all the income goes on one line. It is important for you to maintain records of the source of that income. Some will send you a 1099 and others will not. If you use tax prep software or an accountant they will need a sub-total of the 1099 and the non-1099 amounts. Expenses must itemized by category if using a schedule C. C-EZ filers (those with expenses of less than 5K I think) just provide the total amount. Again I strongly suggest good record keepping by category. I use Quicken to track income and expenses. I might have 57 items paid for advertising. Only the total for advertising is reported on the tax form. But if I asked to produce an itemized list for an audit I can do so with a few mouse clicks.
So basically if Im writing off less than 5000 in business expenses I just provide the total amount? I guess the only time it requires great detail is if im getting audited? Lets say you get audited or have to do itemized, what if your getting paid hundreds of times by the same company via like paypal or check and you doing hundreds of transactions through the same site for business expenses(like domains). Do you have to list EVERY transaction or just the total amount per businesses that paid you or businesses you bought something from?
I have never been audited so I can not give you a definate answer. I am prepared to provide a detailed list of every transaction and a sub total by payor, vendor or category. This stuff is easy to download from PayPal in excel format. The open office software (free) can read that file. When it comes to taxes my best advice is to dot all the i's and cross all the t's. The extra few hours per year you spend documenting, once you have a system in place is the best buy you will ever get on "insurance".
I don't have a ton of experience with audits, but I have some. You're not expected to have a detailed information base about every little transaction that goes on over the course of the year. You should have documentation for the majority of things that happen, though. You're going to have to show proof of your total income numbers.
Just curious why do you think you were audited? Did you make a lot of money or write of tens of thousands of dollars or something? How can you show proof of your total income numbers without having to go over all of the transactions? Another thing that makes it really difficult is that there may be differences in reporting. For example they make a misake or they don't factor in paypal fees, where the other side won't report that, but it shows up on your end of the paypal transaction.