Help! Paying Taxes for the first time on affiliate earnings

12 replies
Hello everyone,

I searched the thread for information on taxes and couldn't find anything.

How do I get earning info from amazon(amazon affiliates) and google adsense to print out and bring for when I go file my taxes? I am new at filing taxes for affiliate earnings, what to file it as, etc and I was hoping for some good advice here from people who know what they are talking about. It would be much appreciated :p
#affiliate #earnings #paying #taxes #time
  • Profile picture of the author GuruGazette
    They will send you a 1099 if you earned over $600. You'll just take those with you when you go in to file and the accountant will know what to do with them. Most of my 1099s arrive in the mail by the end of January.
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    • Profile picture of the author MarketologyTeam
      Originally Posted by GuruGazette View Post

      They will send you a 1099 if you earned over $600. You'll just take those with you when you go in to file and the accountant will know what to do with them. Most of my 1099s arrive in the mail by the end of January.
      This.

      However, I've had Adsense be late/not even send a 1099 in the past. I assume it was just an error as I had made over the required $600 to justify one.

      You should be able to log into your accounts and look up "earnings history." The page may or may not be printable. Either way just copy down the final sum you earned and take it to your tax guy/gal.

      Side Note: Congrats on the earnings
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  • Profile picture of the author Shane12
    1099s should be sufficient to show revenue unless you are doing something like regularly billing through Paypal. You can expense things such as hosting, advertising, domain fees, etc., so you'll want to print out the invoices from those as well. I track all of this in Excel throughout the year. I used to use Quickbooks and then Quicken, but Excel with some sumifs is all I really need and a lot simpler to work with.

    You can create a corporation if you want, or you can file it under your personal taxes on your Schedule C.

    One thing I never knew until after my first big year was about quarterly estimated tax payments, so you'll need to be prepared to start doing that this year. I pay what I need based on the form, but as the year goes along, I'll adjust it if I think I'm going to end up owing less (not more because that's just giving the government an interest free loan so they can wait), which I use the Dinkytown 1040 calculator to estimate.
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    • Profile picture of the author Heather88
      Originally Posted by Shane12 View Post

      1099s should be sufficient to show revenue unless you are doing something like regularly billing through Paypal. You can expense things such as hosting, advertising, domain fees, etc., so you'll want to print out the invoices from those as well. I track all of this in Excel throughout the year. I used to use Quickbooks and then Quicken, but Excel with some sumifs is all I really need and a lot simpler to work with.

      You can create a corporation if you want, or you can file it under your personal taxes on your Schedule C.

      One thing I never knew until after my first big year was about quarterly estimated tax payments, so you'll need to be prepared to start doing that this year. I pay what I need based on the form, but as the year goes along, I'll adjust it if I think I'm going to end up owing less (not more because that's just giving the government an interest free loan so they can wait), which I use the Dinkytown 1040 calculator to estimate.
      Wow I am so new to all of this, I have no idea where to get started with this. I am new to taxes overall, and I am learning. What is sumifs and Dinkytown?
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      • Profile picture of the author Shane12
        Originally Posted by Heather88 View Post

        Wow I am so new to all of this, I have no idea where to get started with this. I am new to taxes overall, and I am learning. What is sumifs and Dinkytown?
        I use sumifs in Excel for simple addition.

        Code:
        =SUMIF(B:B,"=Revenue",D:D)
        In column B, where I list Revenue or Expense, this would return all my revenues, summed up with the figures that are provided in column D. Column A is the company name (I add up how much I made from each company on another line), and Column C is the expense/revenue type (for example, I add up how much I have spent for the year just on domains).

        Dinkytown offers financial calculators. I use their 1040 calculator to estimate my taxes. 1040 Tax Calculator
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        • Profile picture of the author Heather88
          Shane 12

          Thank you for that 1040 tax calculator, It kinda helps me understand an estimate of what taxes I have to pay, and it kind of eased my fears a bit.

          I have been reading a little about forming a corporation, or an LLC. Would you say doing this is beneficial for taxes?

          I mean, I was thinking about those individuals who actually do earn over 400,500,600,700k and beyond in their online business, and I know the taxes come to a whopping 35% or so at that income level.

          I am not really anti taxes, but even as just someone who was raised by schoolteachers, If I made 700k a year and they took 35%, I'd feel like a kid who got his ice cream cone robbed straight out of his hands lol.

          I heard there are some tax benefits to corporate or llc setups.
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  • Profile picture of the author bones46
    If you have taken payments over 2013 - you should already have the information needed either from canceled checks or on your bank statements showing those deposits. Or, on most of these eCommerce sites you should be to print out a listing of all payments received.

    Then, you will have to compile - from your own records - the expenses your business had in earning those revenues - not to mention any and all overhead costs you might have spent last year.
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  • Profile picture of the author BradVert2013
    Find a good certified accountant. They cost money, but are worth their weight in gold in the amount they can save you in deductions and tax breaks you didn't even know existed.

    EDIT: Also get a good lawyer if you want to set up an LLC or other type of formal business entity. Again, it'll cost some money, but they'll help you get all your ducks in a row. When I created my LLC I used a lawyer and it was well worth it.
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  • Profile picture of the author Pedro Lopes
    My personal resolve to this is to hire an accountant, This might just be me but I'd much rather pay someone to handle all of that so I can focus on making more money..
    If its an affiliate network that you're not making more than $500/yr from then don't even worry about it..
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  • Profile picture of the author GlobalTrader
    Renowned Judge Learned Hand (January 27, 1872 – August 18, 1961), provided us with a great quote about paying taxes:

    "Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions."

    Not knowing your situation, I would give you or anyone who is serious about their business and/or finances to get started with an accounting software for both your business and personal finances. It will make it so much easier for you and a CPA (if you hire one) to do your taxes and 'estimated taxes', which is something you should be paying if you are earning a decent income from your business since there are potential penalties for not making adequate estimated payments (sorry, I cannot advise you on what those levels are).

    In addition to accounting software (I use Quickent Home & Business since 1997 - Love it!), you can also use TurboTax software to help you through your taxes and decide if you need a CPA to file them. Anyone who has a problem with TurboTax, remember, our former Treasury Secretary, TurboTax Timmy Geithner used it to file his taxes prior to becoming Treasury Secretary.

    I have used TurboTax for about 14 years now and had one instance where I hired a CPA for about 3 hours of consulting due to an investment situation that I was unfamiliar with.

    Once you get your accounting software set up, try updating it at least monthly or every two weeks, it will soon become routine and save you a heck of a lot of time but the initial set up can be time consuming - the sooner you do it in the year, the better!

    Remember that ALL expenses relating to the production of your income are something you should be tracking to help reduce your overall taxable income.

    Last, I have absolutely no affiliation with the following business except for being an extremely satisfied customer for about 7 years now - they have some great combo deals on accounting and tax software (I updated my 2002 Quicken Home and Business to the 2013 version with them last year) check them out and compare prices with Amazon or Ebay but I think you will find they have the best prices at Great Downloadable Products!

    Hope you have continued success with your business and that you get started right away with tracking you finances, both business and personal.

    I think there was a saying I read once that was something like: Take Care of Your Money So Your Money Can Take Care of You.
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    GlobalTrader

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  • Profile picture of the author Shane12
    I haven't used an accountant since I had a corporation, which was not worthwhile, and the tax filing requirements were a bear that I would not have wanted to attempt on my own. Certainly worth exploring the use of one, but I don't see the value in it for my own circumstances. It's a lot easier/faster to do it myself. Granted, I don't have particularly complicated taxes or much in the way of deductions. The estimated taxes worksheet is real simple as well, which of course is what should be used for estimated tax payments if you have a prior year to base it on, but I use a calculator in case the year is lighter than it suggests because there's no way I'm going to pay extra and then wait for a refund.
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