Affiliate Programs and Taxes

[Tomseys]

I have a friend who has a day job and earns money from affiliate programs. What is the best way to minimize his tax payments on the affiliate income? Does he need to declare a business somehow?

[Lil_Red]

Disclaimer *I am not a tax accountant*

It would be best if he made an appointment with a tax accountant who can advise him on his best options.

[nfinland]

Hi,

I think that you should have a business if the incomes becomes a little higher (whatīs a little higher then...?). This of course is related to the counrty you live in. In some countries itīs illegal to take the incomes as a private person (you have to pay taxes.

Anyway I use a business name and run my web sites as a hobby. I can buy all kind of personal stuff to the business and pay only a small salary to myself (avoiding taxes).

[wellzy]

I have affiliate programs on the side and recieve 1099 forms from each. It's not too bad if you have a moderate amount of expenses. I am not an accountant, but just use TurboTax and have had no problems. Keep your receipts and make sure it's a legit write-off and you should be OK.

[lukasz]

It is very interesting topic. Unforunately the answer will be: that depends.
Mostly it depens on the country where the income was derived and then on the country of residence.
If you friend earns really lot of income he can establish company in tax-heaven.

[charlier]

If he's a US citizen he could move to a foreign country, arrainge so his income is 'foreign' sourced and then deduct the fist $80,000 from his taxes. You can also deduct living expenses.