How do you pay tax on your income?

[usedcarfinders]

I recently decided to get back into affiliate marketing, this time I would like to invest alot more time and dedication to it, but I have a few questions.

How do the majority of you conduct your business? I personally would like to keep my personal information out of the mix. My new webside already has my personal information on the whois database and I would like to put it under a business. Do the majority of you use a corporation to sign up for affiliates or your personal information?

Any help would be much appreciated.

 

[Linda Buquet]

My guess is (and from what I've seen as an affiliate manager) the great majority of affiliates just use their name. Quite a few do use a business name though. (My best guess from what I remember is that about 5 - 15% are corporations.)

So I think it's a very personal decision. Incorporation does require some additional bookkeeping and some say it provides some additional tax advantages and protection. When I asked my accountant about it, he said for small sole proprietors, incorporating doesn't really provide many benefits.

So I'd check with an acct for your personal situation.

 

[ArizonaJay]

Disclaimer: I am not a CPA and you should check with a good CPA before you make a decision. But I am a former accountant and have owned several businesses, so I'll throw in a brief of the main alternatives:

Keep it all in your name and keep careful records and receipts for business income and business expenses. I personally find this to be a pain and makes tax time more of a headache. I also suspect I lost some deductions for business expenses when I used to do it this way.

You can incorporate. Typically expensive and paperwork intensive. Most people use a lawyer to draft the documents (and should, unless they have no other assets, including a house) and then need a CPA to do their taxes for the business and their personal returns. Yes, I did say that the business has a separate return. And tax consequences may not be favorable to a small business. I'd suggest considering incorporating when you have employees or if your doing business in a risky industry where your personal assets might be at risk.

Do an LLC - Limited Liability Corporation. Less complicated, expensive and less paperwork than a Corporation, but provides some of the possible benefits of a corp in that it can shield your personal assets from business liabilities. Definately something to consider if you are making a lot of money and/or you have sizable personal assets. (and don't forget your IRA's when you consider those assets. Another thing to ask a CPA about.)

Do a dba. Doing Business As. Register a name for a business with your state. In some areas, you also need to register with your city and/or county. You will still be a sole proprietor and pay taxes as a sole proprietor. Your personal assets will not be shielded, but for most small business owners, that's not really an issue. The dba does a couple of things that can be very helpful. It allows you to get a business checking account as well as a business credit card (assuming your personal credit is adequate). This separate business income and expenses VERY easily. No muss, no fuss. You will also qualify for a tax exempt certificate if you ever want to purchase inventory wholesale yourself then sell it to others (yes, you will have to charge sales tax and file the sales tax return and pay the sales tax.). Cost is minimal. Usually about $10-20 for state registration and less for counties and cities.

Let me know if you have further questions, and I'll try to help.

 

[jefftd7]

I'm supposed to be paying taxes???