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declaring internet earnings


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I'm talking about individuals who run forums and charge for subscriptions or take donations, who have websites and charge for advertising and maybe sell hosting (on a small scale) or sell their services (or 'hobby') such as web design or graphics design.

Obviously it's so easy to use PayPal and be done with it. But are you supposed to be declaring all earnings? Are any earnings what so ever classed as taxable business earnings?

What are individuals in this position supposed to be doing? Should you be registered as a business? If you are in this position, and i presume quite a large group of members on here will be, how are you covered? etc..

Any insight on the subject would be great :)

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Essentially yes, all earnings you make must be reported - at least if you're in the US, I don't know about other countries.

How and when you do this is a bit murky and can vary depending on how you treat yourself (self employed, contractor, etc...).

Anyone with a reasonable cash flow should talk to a CPA or a small business lawyer to stay on the good side of the law. The golden rule here is "the government always gets its due".

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You should have registered as a buisness within three months of starting to accept money as a buisness or individual (sole trader/freelance etc) otherwise there is a nice £100 fine :(

You wouldn't have to do it monthly (PAYE) but usually around 50% instalments. It obviously gets more taxation if you have another "regular" job.

You are supposed to declare all earnings but unless you make a substantial amount or are 'off the radar' to the tax man, you are unlikely to be investigated. Watch out though because the tax man is known to monitor top ebay sellers etc.

Rule of thumb is if you're worried and you think you earn a nice amount then register yourself and declare the earnings, nothing worse than a massive life destroying tax bill after a few years :p

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