I am about to make my first 100 with Google Adsense and I am planning on using the money to purchase some custom pens to advertise another website that I run. Because this first one-hundred will in no way be profit at all (spent much more on hosting over the years as well as a few bust domain names) how would I report this so that it won't be taxed as so? And where is the best place to buy custom pens? Thanks.
Google Adsense Tax Question
- Thread starter computerboy
- Start date
No, they're not your employer you are an independent contractor of them making you responsible for withholding and filing properly.
Unless you itemize (assuming you don't have a separate business entity that biz expenses go under and if you did you wouldn't be asking) you'll have to pay taxes on it.
And on another note... fucking pens? You're joking right?
And on another note... fucking pens? You're joking right?
Okay, so:
You should have an LLC or S-Corp.
That LLC or S-Corp should have it's own savings account and checking account and also their own credit card.
All business expenses should be run through those two accounts. Deposit checks to the SAVINGS account only and transfer cash as necessary.
Buy Quickbooks/MS Money or set up a simple Excel spreadsheet.
For each deposit you need to denote what the deposit was (ie, income, refund, etc).
For each expense you need to categorize the expense (service, office supplies, etc).
At the end of the year take this all to a CPA (NOT just an accountant) and have him/her file the corporate return. If expenses > income you owe nothing.
If income > expenses - then the CPA will figure out what you owe.
Using a CPA gives you some plausible deniability if you are ever audited. There is always some grey area on what is/is not a valid deduction. If you used a CPA for your taxes however you can show you had a "good faith" attempt to get your taxes right and if you ever are audited you are probably going to be looking at some minor fines, etc.
Most of the time you do not get into "REAL" trouble with the IRS unless you hide income - and not declaring that $100 of adsense earnings would count as hiding income.
You should have an LLC or S-Corp.
That LLC or S-Corp should have it's own savings account and checking account and also their own credit card.
All business expenses should be run through those two accounts. Deposit checks to the SAVINGS account only and transfer cash as necessary.
Buy Quickbooks/MS Money or set up a simple Excel spreadsheet.
For each deposit you need to denote what the deposit was (ie, income, refund, etc).
For each expense you need to categorize the expense (service, office supplies, etc).
At the end of the year take this all to a CPA (NOT just an accountant) and have him/her file the corporate return. If expenses > income you owe nothing.
If income > expenses - then the CPA will figure out what you owe.
Using a CPA gives you some plausible deniability if you are ever audited. There is always some grey area on what is/is not a valid deduction. If you used a CPA for your taxes however you can show you had a "good faith" attempt to get your taxes right and if you ever are audited you are probably going to be looking at some minor fines, etc.
Most of the time you do not get into "REAL" trouble with the IRS unless you hide income - and not declaring that $100 of adsense earnings would count as hiding income.
this is ridiculous. unless he's making more than $100 elsewhere a separate entity isnt necessary.
LOL.
Forming an LLC or an S-Corp will cost more than the $100 in a lot of states. Same for filing the tax returns on those.
Anyway, in general you deduct you business expenses from your income and you pay tax on the difference.. If you plan on making more than the negative money you've already made you should probably be tracking business expenses (helps to have a separate biz acct.).
Unless you're incorporated you'll probably be filing taxes as an individual anyway. You're probably safe doing your taxes with TurboTax and when you start making more money than negative you can hire a CPA to take care of your shit.
