What about Government Tax?

Yes, you must declare. PayPal and several other vendors as far as I know, share the info with the government.

So when tax time comes I fill in the amount I earnt from Paypal?

It depends on where you reside. In the U.S., independent contractor (Non W-2 employees) filing requirements often vary. However, almost all independent contractors report income on Federal Form Schedule C -Profit or Loss From Business.

Be sure to keep accurate records (which includes PayPal records) in the event you are audited by the State/IRS.

Tip: Write off as many business expenses as you can possibly account for.

Source: Tax Professional by Day.

Check the form provided for you and you will be able to know how much they will be charging you and how much you declare.

Unless you want to get in trouble with the IRS, yes I do recommend filing your income. Plus when you think about it, most affiliate networks as well as Paypal do ask you for tax information. This applies in most countries, particularly here in the US.

If you for any reason hate to pay taxes, you could always do what people like David Copperfield/other millionaires do. Live in specific places in the Caribbeans or other countries that offer tax shelters. The US Gov. won't like it, but as long as you're not involved in criminal activities they usually can't do anything about it.

WSO can be considered professional development expense in a lot of cases. Hosting can be considered an expense. article writing, website design etc... There is so much you can expense but you should consult with a tax professional. Disclaimer...I am not one and am not offering tax advice. Ultimately, you are responsible for what you decide to claim as tax deductible expenses so it's best to educate yourself as much as possible in this area or just have a bookkeeper/tax person keep your books for you.

Ah cool thanks for knowledgeable insights (:

no man you don't have to claim it. whatever you earn online is tax free because the internet is without borders. sorry - in one of the sarcastic moods where I have to joke about everything.

I guess what they say about sarcasm being the highest form of wit is true (oh there I go again). the more tired I get the more sarcastic I become.

To make the declaration process less complicated than it has to be you need to record everything from day 1. Any money spent and coming in and I do mean every transaction no matter how small. If you are earning enough then you should hire the services of an accountant, as it will make things a lot more easier.

Unsure of it. Go and see an accountant.

Hey I saw that WSO re taxes... Anyone buy it? I would have bought it if it weren't videos only, I need written material... but I might buy it if someone tells me how great it is. (if you reply please say which one it is, I think there are a couple)

The products you buy (i.e. WSOs) are not tax deductible, they are business expenses. Track very dollar you earn and track ever dollar you spend on the business. The money that you have at the end of the year is your profit and that is what you have to claim on your taxes. There are rules about what constitutes a business and what constitutes a hobby. If I remember correctly it was that you had to make a profit 2 (or was it 3) out of 5 years to claim it as a business. You can find some decent articles about business expenses online with a search or two, but ALWAYS consult a tax accountant. Cost associated to filing taxes this year can be claimed on next years taxes!

The other thing you can do is actually claim expenses related to a home office. If you calculate what the cost of your house is for the year and then divide it by the square footage of your house, that will give you a cost per foot. Multiply that amount by the square footage of your home office and that is your office expense. One thing I have been told about that, not sure if it is true or not, is if you start really trying to break things down that much, you start to open yourself up for an audit.