Affiliate Profits and the IRS

[Pocket_Aces]

This may not be something we all want to discuss openly but I think most of us have kept our actual names/URLs secret so we should be okay.

How do you all handle the money you make from being an affiliate when it comes to taxes? Do you report it? If so, how do you report it?

If you don't report it, how do you get the money? I would think a huge Neteller transfer back to your bank account would look odd. It might look like a drug runner or terrorist (I don't think the govt is actually profiling poker affiliates).

Do you transfer small amounts frequently? Do you just use the Neteller ATM card and buy everything you can with that?

I was considering 'selling' Neteller funds on eBay payable via PayPal. I don't know if eBay would allow that though.

I'm not really trying to avoid paying taxes on my income, I'm just concerned I will get in even more trouble if I report this income since the legal status of all of this is a bit unclear.

For the IRS snoops, I don't actually have an affiliate account, I am asking all of this for a friend of a friend. All uses of the term 'I' above actually refer to said friend of a friend.

[Flopster]

There is nothing illegal about affiliate marketing.

I intend to report the income and pay tax.

IRS snoops... :blink:

[bfuchs]

pocket your obviously an IRS employee. Quit the ploy. your not going to get jeremy's millions.

[Flopster]

I almost forgot...

My answer above (see above) was for a friend. I did not actually write it.

[PPP]

"I'm not really trying to avoid paying taxes on my income, I'm just concerned I will get in even more trouble if I report this income since the legal status of all of this is a bit unclear."

Whatever the risks are of doing any of this, they are dwarfed by the risks of lying to the IRS. Dceclare your income, pay your taxes. If you want to be more than a little generous in terms of deductions or whatever, fine, but declaring and paying should be at the top your list of things to do... especially if you are not rich and established. If you want to buy houses and such, you want to show income.

"There is nothing illegal about affiliate marketing."

I assume you were joking because that statement is total nonsense.

[Pocket_Aces]

So if you report it, what do you report it as? Ordinary income requires a W2, right?

[tomysole]

maybe a 1080????

[GregK]

I will gladly pay every penny owed Hope I owe a ton too lol

I think I'll go talk to the local tax guy soon & get things setup to start paying quarterly.

Don't want any big "yearly" surprises

[PPP]

Lots of ways to call this business. You probably should consult someone, and tell them your specifics.

Remember, the IRS were the ones who brought down Al Capone. I for one don't toy with them.

And you should DEFINITELY be getting advice on how to handle your taxes from a professional accountant.