Claiming Affiliate Program Income; Federal and State Taxes

Posted by interfuse on August 12th, 2010

I was recently asked whether or not you had to claim income from affiliate programs on your tax returns. The answer here is absolutely yes. The income generated from affiliate programs should be viewed as a small business income; whether you are operating a registered LLC or whether you are operating as a Sole-Proprietorship.

If your earnings from self-employment were below $400.00 in a given year you may be exempt from filing.

For more information regarding business registration and filing taxes please visit the IRS Small Business and Self-Employment Tax Center: http://www.irs.gov/businesses/small/

Specifically, for information on Filing and Paying your Business Taxes, you may visit this link: http://www.irs.gov/businesses/small/article/0,,id=109805,00.html

Also, you will want to write off any business expenses, these are deducted directly from your income and can include Website Hosting, Domain Name Registrations, Computer Software, Computer Hardware, Advertising Costs, Office Supplies and any other expenses you incur during the course of your fiscal year.

More information in regards to Business Expenses and write offs can be found here: http://www.irs.gov/businesses/small/article/0,,id=109807,00.html

During the course of each fiscal year, you will want to be sure to keep impeccable records of all of your income and expenses. A great way to do this is by keeping copies of everything and organizing them into a Smead A-Z & Subject Case File (Office Depot & Office Max have these); create a new one for each year and doing your quarterly taxes and staying organized will become a pleasure.