How do you record IM income and costs for tax purposes?

You'll need to show every bit of revenue along with every expense. For the revenue, total sums evidenced by records from Paypal et al. should be fine, sparing you from the tedious chore of documenting every sale. But for the expenses, you'll be doing the legwork for every item, I'm sad to say.

For all of the transactions and revenues you generated, Paypal or any payment processor is the best option. But if you want to record your expenses, you should prepare a simple spreadsheet for that.

Ooh, you're back home now, are you? I bet property prices there are a lot more manageable than they are in London? .

There's lots of software you can use to keep records of this sort of stuff. I don't do it that way, myself, because I don't trust computers and prefer writing. But I paste lots of stuff into word-processor documents and keep a print-out. It's quick and easy.

The thing is, ultimately the answers to what you're asking depend quite a bit on whether you're going to get a tax audit in SA, what the local rules are, and so on, and nobody can advise you about this apart from a local accountant?

However ... personally, I think it is worth keeping records of each sale (even if only by downloading or copy/pasting ClickBank statements into a WP-document, or something), even if the local tax authorities don't ever require every sale made to be itemised ... because when all's said and done, it's a business. And you're not running a business properly without doing the books fully, however much of a pain in the neck it is.

I don't need to do this for my tax authorities, and won't get an "audit" anyway, but I do it for myself, and because I might want to sell my whole business one day (it is, after all, a real asset that produces increasing monthly income, just as yours is - and that's something you can sell, in future, for a lot of money). But nobody's going to buy it without "seeing the books" which means you have to have proper "management accounts" just for your own use anyway, no? :confused:

Thanks for the advice, everyone. And yes, Alexa, property prices are super low now. Unfortunately its the same when you want to resell it, hehe.

Another thing that is bothering me...

If I only count the money that I withdraw from my paypal account, then this amount obviously already has my expenses subtracted. Do I still need to specify each of these expenses?

Anyone here with a link to a niche spreadsheet file for recording revenue and expenses and such?

I have a simple CSV file. I am pretty lazy with records so instead of doing them throughout the year I will usually spend one or two days around tax time and collect all my records together.

I will create one spreadsheet that is full of my expenses. This is itemized incase I was ever to get audited. I will also print out a copy of each invoice so I can file all the records away should I ever have the tax man knocking on the door (they are always going to want to see proof of your expenses if the day ever comes.)

In the other spreadsheet is all my income. For things like Paypal I will export a csv report for the whole year and then go through and remove any transactions that should not be included. Once I've done that I can use an excel formula to add up all the income and give me a grand total income for Paypal.

I will do the same for any other income streams and then add them all up for a total gross profit. I hand those spreadsheets over to my accountant and then head off to the pub.

Try Wave Accounting, it's free to use.