What if you're already making money...?
Submitted by JasperP on Fri, 05/09/2008 - 23:17.
I'm recently started making a decent amount of income with affiliate marketing as a Sole Proprietor...
What's the best way to transition from a sole proprietorship to an LLC with my current income and expenses?
Once I form an LLC or S-Corp, Would I have to file taxes differently under my SSN for the income and expenses?
Also as far as organizing my expenses.. i'm probably doing a really horrible job of tracking everything... I could imagine that I would need to print out all my invoices for everything like from Adwords, Yahoo, Hosting, Autoresponder service... etc. How did you guys start tracking your expenses?
Any tips from the experienced affiliate marketers that made this transition?
Thanks!
JasperP
"What's the best way to
"What's the best way to transition from a sole proprietorship to an LLC with my current income and expenses?"
This may not be the best way, but the way I intend to do it is cease trading as a sole proprietor and, once I have a Tax ID, start trading as a corporation.
"Once I form an LLC or S-Corp, Would I have to file taxes differently under my SSN for the income and expenses?"
Once you have a corporation, it pays taxes (if your state has corporate income tax) which is why you acquire a tax ID. You pay personal taxes on your income from the company and elsewhere if any.
"I could imagine that I would need to print out all my invoices for everything like from Adwords, Yahoo, Hosting, Autoresponder service... etc"
Yes, keep paper copies of all documents related to business transactions.
Kuproverto: That makes alot
Kuproverto:
That makes alot of sense... I guess I'll try to figure out how to transfer my PPC accounts, Affiliate Networks and other things to the company name...
If ANYONE has experience doing that... I could really use the advice.. I'm hoping it's just a simple "change of name, address and Tax ID".
Worst case scenario I can think of would have to be that I have to create accounts for everything under the company name and REDO all the affiliate links on all my web sites...
Thanks for the response!
You shouldn't need to change
You shouldn't need to change any PPC campaigns, you don't want to risk losing any QS you have established. I don't think it really matters what login details you use for AdWords, etc.
The affiliate networks should have a profile page where you can change your details.
I see in my clickbank
I see in my clickbank account I could change the Tax ID from SSN to EIN...
Would they send a 1099 for both SSN? That would mean the checks would change from my name to the business name... does that mean I would have to 1099 under my name and my business name?
I definitely don't want to mess with my Adwords account... but for the sake of taxes and filing... I was thinking that I had to make some changes so that it appears that I'm using my Adwords account for my business entity rather for myself as a sole proprietor
This side of business is confusing! I'd rather just work on landing page and keyword research than play with quickbooks and tax filings!
I think I'll try to find a tax consultant for this.. i'm sure some accountants have gone through this for small business owners...
Kuproverto ... I really appreciate the advice.. Thanks again!
"Would they send a 1099 for
"Would they send a 1099 for both SSN? That would mean the checks would change from my name to the business name... does that mean I would have to 1099 under my name and my business name?"
In their eyes you'd be a business with an EIN so the checks would be made out to your business but they probably won't send you a 1099. This is from CB accounting:
===
In accordance with IRS regulations, 1099's are only sent to individual accounts
reporting under a SSN that earned over $600 in affiliate commissions (not
including direct product sales) during the calendar year. In your case, your
use of an EIN on your accounts essentially removes our 1099 reporting
requirement to the IRS. For your convenience, you can see the total amount of
payments made to you during the year on the top of the reporting page in your
account, for use in tax purposes. If you need something else, or something more
formal for your records, please advise and we will do what we can to provide.
===
I think finding an accountant is a good idea. Better safe than sorry where the IRS is concerned!
1099
It is easy to change your account settings in Clickbank or CJ to an EIN (LLS or S-corp) rather than a SSN. Note that the above comment about sending a 1099 only applies to an S-Corporation. If you form an LLC you will still receive a 1099. I know I do from Commission Junction having an LLC. You will receive a 1099 for the income you have generated under your SSN and so you will have to do two tax returns.
If you need further assistance you can PM me.
Best,
Jon Shaw
Tax Help
I am in Utah and would like to talk with you Jon about doing my taxes. Is there a way to contact you so I can tell you more information about my situation?
Jon, I went to PM you and it
Jon, I went to PM you and it looks like since your username is not verified you cannot accept PM's...
So I PM'd you at your old username, jonshaw.