Should I register as a business?

This is my first year in internet marketing, so I still haven't been through a tax season with all this web stuff I've done.

All this internet marketing stuff is just a side-job/hobby for me. I work full-time. However, unlike my ebay side-business, it adsense, cj, amazon, require tax information when making payments.

By the end of this year, I'll probably end up being taxed on about $7k-$10k worth of income. Of course, with that I've spent plenty of money on domain registration, hosting, buying websites, buying marketing products, etc.

So, do you guys go through the effort of registering an official business for your internet marketing so you can write this stuff off? If so, what is your annual income/expenditures from this hobby/business?

Or, is there another (potentially better?) way to handle the net profit vs. gross revenue of your IM income when doing your taxes?

 

Well, its different for many people but for the most part not many people register a business name for the Gov't for their online revenue. Google taxes you fully on the cheques you receive and since paypal is under the grid for tax it gives most people a chance to just stay out of the Bus. thing. If you are making more than 2000 per month it is recommended that you register a business license or you may be indicted as you are cashing huge cheques to your bank. Als keep in mind that you will need to track monthly income and expenses just like anyone else and may need to hire an accountant.

Personally, they can blow...because I already own a retail store and throw down a good 8,000 per year along with my property tax which is close to about $3000/per year, etc. I'm in Canada and the tax is unbelievable out here. People usually give up 60% of their earnings to tax once the money is gone with all of the junk here.

 

Yes you better register your business if not you will very troublesome in the future.

I not recommend you do something to avoid tax although I know the way to do it.

 

You don't mention which country you are in..... If you were in the UK you would have already committed an offence by not registering as self employed and would be liable for a fine.

In most countries you have options in terms of the legal entity structure of your business (sole trader, limited liability company etc) and an accountant would be able to advise you which is the most efficient given your circumstances and plans.

 

Not sure where you are... In the US you should at least file for an EIN number. You also should expect a self employment taxt which will be added to your filing, and if not done correctly will catch up to you in the long run. Just make sure you do the research and understand the process as best you can. Best of luck.

 

Yes. It becomes very difficult to "untangle" the finances after the fact. Your best bet is to do it earlier rather than later.

 

You don't need an EIN if you are a sole proprietor or even if you are a single member LLC with no employees. See: Does My Single Member LLC Need Its Own EIN?

At least in the U.S., when you ask about "registering an official business," you are really asking several questions. Do you need to "register" with the IRS (i.e., obtain an EIN); do you need to register with your state's secretary of state (or equivalent office); do you need to register with your state's department of revenue; do you need to file somewhere to comply with your state's assumed name statute; do you need to obtain a business licenses, usually from your city or county? The answer to all those is "it depends."

Even if you are a sole proprietor doing business under your own name (not a dba) and have no need to file anything to "register as an official business," you will still need to record your revenues and expenses and report them at tax filing time. If the income from your "hobby" exceeds the related expenses, you will owe both income and self employment taxes. Failing to plan for those may leave you short on April 15 and may result in penalties for failing to pay estimated taxes during the year.

Hope this helps.

 

Always be above board with the tax man. The time and money you will spend if you are not, will far out weigh any time you put in, and money you make.

 

yup..don't be shy my honey

 

Why not, if we earn then we should register and pay tax so our country will develop.

 

Yes sure .Its good way to earn money .

 

If possible use a separate credit card for all your business expenses, this helps in record keeping, and most credit card companies send you a year end summary that categorizes all your business expenses.

Unfortunately, you will get hit with the nasty self employment tax, so remember to file schedule SE as well as your 1040 when preparing your taxes. Lastly, when filing out form 1040, you can deduct half of your SE tax.