When does a content site became a business?

[satrina]

Hi, ok I wasn't positive where to post this, so feel free to move it to the correct location.

I run a content/fan website than has until this last month made NO money, it was a pure hobby.

Well I get a lot of visitors daily, and desided I wanted to earn a little money and have started to use Googles Adsense, and have been approached by others to advertise on my site for them.

I am real big on only having clean ads, text ads mostly. So my site will never be "geared" towards making money as its main purpose. It is really just a hobby site. But when does it become considered a business legally? (I know I have to pay taxes on what I makes etc...) But do I have to file for a business licence or anything like that at a certain point? Since I am using Adsense and possibly selling ads? Certain amount of income etc..

Also do you guys see "selling ad space" and "using google adsense" as something different? Or am I just technically selling my ad space to google? (if that makes sense)

Or who would be someone I would need to ask about this? I was thinking our tax person might be able to tell me, but thought I would ask here and see what everyone else had to say.

Love to hear what everyone thinks thanx!

[Chico_Loco]

I am in a similar situation with 1 site that own. i've never actually registered it as a company, but recently I did register a company.. for different reasons.

I too run AdSense ads on my website and only make a bit of cash. I too will have to pay taxes (dammit).

You'll still have to pay taxes on what you make, but there are advantages to registering it as a company. The real reward is that you'll be able to write stuff off. You'll be able to write off your hosting bills and phone calls, internet connection charges etc..

If the cost of registering the company is going to cost less than what you could get back off you write offs, then it might be worth your while.

That said, i only recently moved to the USA and the workings of the system are extremely confusing to me so I may be wrong.. Second opinions please...

[Essex_boy]

Go see an accountant/lawyer.

[donpps]

Be safe than sorry.

Incorporate ASAP. In this day of increased litigation, it is prudent to have the legal shield of a company protecting your personal assets and interests. Depending on what direction you wish to go I will recommend an LLC legal structure. They give you the protection of a corporation without the hassles. Also since you will paying taxes (at some point) you might as well get legal recognition for your business entity.

Lastly, its all about perception. Serious business inquiries go to folks with a "real businesses."

[gussie]

While it is true that you should be very careful, and do your homework about liability, from what you've said I doubt that you need to do anything fancy (and expensive) like incorporating. You will have to report your income, unless you make under a certain threshhold (i.e. a high-school student who makes $900 a year babysitting and mowing lawns). Also, various legal entities like LLC and corporations don't always protect you legally. People can still sue you personally, depending on the circumstances.

I'm in the middle of setting up a business, and it has been a very interesting process. I would recommend that you keep it as simple as possible.
Gussie

[donpps]

Gussie, while I concur that any can sue any thing, you have to agree that any protection is better than no protection.

[HughMungus]

I'm not lawyer, but, maybe to get you on the right track: I thought you could count things like Adsense income as "other income" up to a certain point (?)

Regarding counting things as business losses for deduction purposes, I heard a thing on the radio the other day about making sure you can prove you're operating as a business (e.g., advertising) because if you can't, the IRS will say it's just a hobby and disallow the deductions.

I'm about to start another business thing and I think I'm going to go the LLC route just in case...