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Do you Have to Report your Income?

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Do You Have To Report Your Online Income?

If you have an online business – whether it's selling on eBay, affiliate marketing, direct selling, or even a service you offer – you've probably wondered at some point if and when you have to report that income.

Well, CPA and fellow online business owner, Kristine McKinley, answers this question for us here. According to Kristine…

* You must report all income earned. It's a common misconception that if you don't earn much or if you're just doing it as a hobby that it's not reportable or taxable. That's not true. All income is reportable from the first dollar earned.

* It doesn't matter if you receive a 1099 or not. It also doesn't matter if you earn less than a certain amount. Another myth is that if you earn less than $600 you don't have to report the income. Again, it's just not true.

* However, you are allowed to deduct business expenses from your income, so just because you have to report your income doesn't mean you'll have to pay any taxes. If you have expenses that are as much as or greater than your income, then you won't owe any taxes, and you may even be able to use that loss to reduce other taxable income.

To learn more about how your online income is taxable, and what expenses you can deduct, please run over and grab a copy of Kristine's “Your Top Tax Questions Answered” teleseminar and ebook.”

Personally, I hate dealing with taxes and books, so this is definitely one that I'm going to check out.

Let me know what you think of it if you grab a copy!

Nicole

1 Comment

  • Rachel
    Reply

    My first several years online, my business lost money. This meant paying less taxes on my personal income, however, so while I built my home business that was definitely okay! When my accountant handed me my estimated tax coupons for this year, he told me that if you’re paying a lot of taxes that means you’re making a lot of money! That couldn’t be more true. When you get to the point your business is making a profit, I definitely recommend finding an accountant you trust. There are too many tax laws to navigate, and accountants are worth the money you pay them (their fees are also tax deductible!)

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