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Simple question about affiliate earnings 2010/2011

by excoder01
10 replies
Suppose on an affiliate network (either Clickbank, CJ, Shareasale, Amazon, etc), I earn $800 for the month of Dec. in my affiliate commission balance, but did not receive the check/payment until mid-Jan of 2011.

Now, when it comes to reporting taxable income, would the $800 be part of 2010 earnings or 2011?
#affiliate #earnings #question #simple
  • Profile picture of the author excoder01
    Anyone knows?
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    • Profile picture of the author Jill Carpenter
      I'm not an accountant or lawyer.

      OK, with that out of the way I think the best way to go is going to be to declare it on the year it was made. Taxes are not due Jan 1st. You should get that payment well before April 15th.

      I do think you can also save it for the following year if payment is not actually in your account - but you will need to provide bank statements, etc and this could get much more messy when putting things together for the following year.
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      • Profile picture of the author leclaims
        Not an accountant here either, but my guess is you would report it for 2010 because that is when you earned it. You just didn't receive it until 2011. Just a guess.
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  • Profile picture of the author excoder01
    I suppose it could work either way then?

    If I wanted it on my 2010 income, I would state that the money was earned in 2010.

    If, however, I want it on my 2011 income, I could show the money/check was deposited to my bank account in Jan?
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  • Profile picture of the author sarahberra
    I wouldn't count that income until you actually have the check in your hands. It is taxable, but don't add it in to last years total even if you earned it last year. I always count income when I receive it.
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  • Profile picture of the author excoder01
    That's kind of make sense...since sometimes it's possible the affiliate network may decline your checks/payments. You could earn $1,000+ and the affiliate network may even close/terminate your account for some reason.

    Plus, if I earned $50 in June 2010 on Clickbank, but it wasn't until May of 2011 that I got the threshold of $100 to receive my check, then it would be consider 2011 income, I suppose?
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    • Profile picture of the author Tina Golden
      Don't the networks send you a 1099 form with the information on it?

      Tina
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  • Profile picture of the author excoder01
    That is, if you receive $600 or more.

    I know for Clickbank, it just reports the check amount they send you.

    So, if you have a balance of, say, $500, from Dec. 15 to Dec, 30, they send it on Jan. of next year.

    In that case, I suppose you report the amount you receive.
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  • Profile picture of the author DMace
    If you are a cash basis tax payer (which I assume you are unless you are incorporated) it is my understanding that you report only the money that you have received as of 12/31/xx. This amount should generally match the 1099 you receive from your affiliate company. If you did not receive a 1099 you are still required to report it as taxable income. If the amount you think should be on your 1099 does not match the actual 1099 you receive it is your right to contact that company and get them to correct it. Usually 1099s must be sent out by the end of January to give the recipient a chance to review it BEFORE the tax filing deadline!

    You can consult a local CPA and more likely than not he/she will give you a free consultation and help you make the best determination for your situation.
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  • Profile picture of the author Hugh
    You get to pick your own poison on the tax form.

    Hugh
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