In a letter to Jean-Baptiste Leroy, Benjamin Franklin famously said, “In this world, nothing can be said to be certain, except death and taxes.” Even though you might not always be assured of conversions that lead to be commissions, what you can be sure of is that any money you earn as an affiliate is taxable income. If you don’t declare this income, it’s entirely possible that, someday, somebody’s going to come knocking on your door wondering why you haven’t given the government its cut.
We’re not tax experts here at Share Results, but many of us have been involved in some kind of entrepreneurial enterprise in one form or another, and have had to deal with the resulting taxes. Here are a few points that have been assembled from members of our team to give affiliates a little bit of advice on how to handle taxes.
Remember that affiliate marketing is a business
Any time a person makes money through a business venture of any kind, it is incredibly important to declare that income at tax time. Even if it’s not enough to put you into another tax bracket, the best thing we can suggest is to always be honest with your government’s revenue agency.
The reason being is that affiliates often start out slow before they become successful. Once you start to earn enough money for the government to want its cut, it’s best to make sure that you have been honest all along, so that there are no discrepancies in your earnings.
Be prepared
Recognize that any income that you receive will be taxed. To avoid having to pay a lot of taxes all at once, it is a good practice to put some money aside as it comes in, so that you will be ready at tax time. Some people like to put these funds in a high-interest account, so that they’re earning a little bit of interest while waiting to use the money to pay for taxes.
Not doing so could result in you not being able to meet your tax obligations in a timely fashion, which could result in monetary penalties. Nobody wants to pay interest on tax money, so be sure to be prepared for the inevitable.
To know how much money you have earned from the Share Results program, simply log in to your affiliate account and navigate to the payment history section. You can produce a report here that will show you your income over a specific period of time, which will allow you to find out how much you earned over a specific calendar year. For more information, contact your affiliate manager, and they will be happy to go over everything that you need to know.
Read the Terms and Conditions
Every program or network handles taxes in a different way. In some states, there is an obligation for networks to deduct taxes from affiliate earnings, while in most others affiliates are payed directly and it is up to them to declare the income. It’s extremely important to read the Terms and Conditions of any program you belong to and make sure that you are aware of the tax laws in your state or province.
Reducing the obligation
Once your business starts to grow, you should look into ways that you can reduce your tax payout. Like any business, you can write off expenses, so be sure to save receipts that can be used to lessen your tax obligation. There are also other techniques that can be put it into effect, depending upon the size of your business. To find out what methods you might be able to employ, it’s best to refer your questions to someone who makes their living dealing with tax issues.
Talk to a tax professional
In order to be absolutely certain that you are handling your tax obligations correctly, the very best thing to do is to talk to a tax professional. A Chartered Personal Accountant (CPA) should have all of the answers that you are looking for, and can often advise you on the best ways to handle your business taxes. If possible, find out from other affiliates in your area if there is a CPA that they can recommend.
You may also be able to find out some information from your affiliate manager. If you are in a different country from a program that you belong to that is generating your income, you’ll want to find out what that is going to mean for your business. The best way to find out is to refer your questions to a professional.
Once again, we are not tax professionals, but we do think that it is important that affiliates know that there is a responsibility to pay taxes on earnings, and to be prepared for that eventuality. With help from a professional accountant, or other tax professional, you’ll be able to find out the best way to ensure that you are paying your taxes properly, and keeping as much of that money as you can.
If you have any information on how you manage your taxes that you want to share with other affiliates, be sure to leave us a comment below. If you have links to places where affiliates can find out more information, feel free to leave those as well.
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Affiliates Business Tips | As Certain as Death and Taxes
I’ve used every method – blogs, articles, comparison sites, review sites, email capture pages, etc. My favorite is probably direct linking because it requires the least amount of work. Hah.
