Affiliate Marketing and Income Taxes

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As we near April 15th, the question that keeps coming up is, “Do I have to pay taxes on my affiliate income?” Of course you do!!

This topic came up today on Shawn Collins blog, and was also covered by John Chow a few days ago. They both covered it in-depth, so I’ll spare you the rehash. The bottom line is this: If you’ve got a question, contact an accountant. A blog is treated like a business, and as such, you can take a number of deductions.. But no one is more well-versed in IRS deductions and loop holes than a certified tax accountant, so it’s definitely worth the expense to have a professional handle your taxes.

Should you setup an LLC or Corporation for your websites? Should you buy a Hummer H2 (like Zac Johnson or Shoemoney) for the Section 179 tax writeoff? (Did you know that the amount of that deduction changed, and might even be phased out this year?) Should you lease instead of buying a car? Should I be paying quarterly taxes? These questions can only be answered by an accountant that knows your current financial situation.

My accountant was able to save me $5000 last year compared to TurboTax or TaxCut. Considering his bill was only around $300, I’d say that was money well spent!


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