Legal aspects of starting a business?

Here's what I do.

Make money all year and not pay taxes. Then when I go do my taxes I include the income. The tax people always tell me I should pay during the year because I can get a penalty but I never do.

You dont need a business or LLC to make money to answer your question.

I only do this because the amount I make. If your making a great deal, then you need to go a different route.

Well in my opinion you missed a vital step. You should have got a POBox, then started up an LLC and registered all of the following in the companies name:
Bank account
PayPal
AdSense
etc
Yada yada yada
Now you have a business that is legally isolated from you and all that you own: Land, house, car, motorcycle, etc.
That is just me though.

If you make money the Government is entitled by law to their share. The business entity you pick will determine when tax is due.

Most affiliates never make enough money to qualify as a business. Unless you make over $600 from a single source you will probably not get a 1099 (Some larger companies send them anyway), but you still owe money on the profit you make.

If you file a 1040 with a Schedule C and try to deduct business expenses and show a profit after expenses you are in for a very rude awaking. You owe not only Federal Income Tax, but 15.3% Social Security/FICA Tax. I believe there is no State Income tax in Florida so you will probably be okay there. However some states actually tax business property. It's an endless hassle of paperwork.

The bottom line is do not file a schedule C unless you make over $600 from any one company and intend to deduct business expenses.

Anyone that is truly in business online would do well to consult at the very least a bookkeeping service. The law gets pretty tricky and changes yearly.

Do NOT listen to the advice of people who are not really in business as it clearly shows their ignorance. And ignorance is not a defense when you get audited.

As far as a business license goes it depends on your location. Some jurisdictions require it and some do not. It is usually required when you try to set up a business account at your local bank.

Usually you just print out your Paypal transactions or (or CPA or Adsense earnings history). Also if you're using PPC, print out any expenses. then show them to your accountant, and let him/her do the rest.

Treat this like a business

That is the one statement that stands out from your last post. If you already have an accountant, ask him. Get your money's worth. Depending on your state an LLC or S-Corp may be easier to set up.

I will give you this caveat though. Most accountants are not business consultants. They do an excellent job of accounting. Some do a great job at tax preparation (though not all accountants are capable of doing taxes). There are three different reasons to set up a business structure other sole proprietorship.

1) Legal protection
2) Tax savings
3) Access to capital/Exit planning

Most people won't need #3. Talk to a lawyer about #1. Talk to an accountant/tax preparer about #2. You get different parts of the answer from each of them

Sole Prop is the easiest to set up and gives you the least protection and least tax savings. LLC gives you more protection and can be taxed as an S-Corp. Single member LLCs are recognized by all states and can be filed on a Sched C so aren't any more complicated for tax purposes.

S-Corps give you more protection (Mainly because they have been around longer than LLCs and have been more thoroughly tested in the courts) and a different set of tax savings but also bring new requirements as well (Issuing yourself a W-2 for example). They cannot be filed on your tax return as a Sched C but are required to be filed separately on a 1065 and a K-1 issued to your personal tax return. So a higher cost for tax preparation but some benefits from taxes if you are making a reasonable income from the business.

Both S-Corps and LLCs are flow through entities which means the money flows through to your personal tax return. Ask your accountant WHY he recommends what he does. The advantages and disadvantages of each. Make sure you understand the requirements your state has for maintaining the business (any yearly filings, etc.)

Nothing worse that setting up a business for legal protection and not maintaining it. Ask him to explain piercing the veil. It is important to understand it.

Luck is where hard work meets opportunity. SO good luck with your business