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Affiliate / CPA commissions & taxes?

by CryoCrispy
8 replies
This has yet to become an issue I have to deal with, but I was just curious on a few things..

When you get paid commission on ClickBank or other Affiliate / CPA products, how much do you normally set aside for taxes?

The other question I had is what is the average window (or is there one?) to when the commission becomes 100% yours and not subject to chargebacks or refund fees, etc. ?
#affiliate #commissions #cpa #taxes
  • Profile picture of the author Benjamin Ehinger
    To answer your first question it really depends on what your situation is. I have had the situation where I worked a job and paid taxes while making money online and I didn't set any money aside because I was not making much. It also depends on what you are able to write off on your taxes. There are many things you can write off that make your income look much smaller than it is and drop the amount you pay on taxes.

    A safe percentage is about 28% if you make under $100k and 35% if you make over $100K, but there are a lot of factors to consider.
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    • Profile picture of the author BeanCounter
      Originally Posted by Benjamin Ehinger View Post

      To answer your first question it really depends on what your situation is. I have had the situation where I worked a job and paid taxes while making money online and I didn't set any money aside because I was not making much. It also depends on what you are able to write off on your taxes. There are many things you can write off that make your income look much smaller than it is and drop the amount you pay on taxes.

      A safe percentage is about 28% if you make under $100k and 35% if you make over $100K, but there are a lot of factors to consider.
      I agree with Benjamin. I have spoken with many tax accountants, and they tell me the rule of thumb is 25% until you get into that higher tax bracket. You're right, there isn't a cut an dry answer, especially with the IRS tax code.
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  • Profile picture of the author TheWealthSquad
    It also depends on how your business is set up. If you do not have a specific legal structure, I would set aside a minimum of 15% to pay your self employment taxes and probably another 15% on top of that. Once you get a feel for how much you are making and what your profits are, you can adjust that as you go.

    I usually do a proforma tax return for myself in the middle of the year to see what things look like and again at the end of the 3rd quarter if things have changed dramatically.
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  • Profile picture of the author misterkailo
    I have read in a lot of forums about making money online and paying taxes, but nobody has talked about paying city taxes? Do we need to pay city tax?
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  • Profile picture of the author Benjamin Ehinger
    As far as city taxes you will have to contact an official of your city. Not all cities collect taxes and some have different rules for businesses and home businesses.
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  • Profile picture of the author CryoCrispy
    What about the 2nd question, can anyone provide some general feedback on that?

    The other question I had is what is the average window (or is there one?) to when the commission becomes 100% yours and not subject to chargebacks or refund fees, etc. ?
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