IRS is calling! Are you ready for tax season?
I was chatting the other day with an affiliate marketer who is much more experienced than I am at this game. I mentioned that I was still waiting for my 1099 tax forms from a couple of my affiliate networks. One of whom I made a substantial income from last year.
This guy told me that a few years back he made almost a million dollars over an 18 month period. Now let me tell you, that in itself completely blew my mind. I know that there are people out there doing this but that kind of money to me is beyond comprehension. At least as an affiliate marketer. I mean, I personally know folks in the corporate world who make upwards of a quarter million a year and you hear about corporate CEO’s who make tens of millions per year in compensation. But to generate a 7 figure income from internet marketing??? That, to me, is remarkable. Hell, my 5 figure a month income still completely blows me away.
At any rate, this IM went on to tell me that despite that astounding income, he never sent in his self-employment taxes and barely kept a quarter of his income for tax time!!!
WTF??? This guy made almost a million dollars and right now he is broke and is scheduled to go to tax court shortly.
Maybe it’s because I spent 9 years doing retail e-commerce and had to keep strict books and filed my quarterlies, or maybe due to my age, or maybe I’m just old school but when I get those checks from my affiliate networks or adsense, I take HALF of it and stash it in an online saving account that is specifically set up for this purpose.
As it is, I’m stressing that I didn’t hold enough back in 2007 but that’s me. If I didn’t have something to worry about I probably wouldn’t be happy.
So, I’m hoping that everyone did the smart thing in 2007 and kept back enough money to pay the IRS come April 15th. And if this is your first year in any type of internet marketing remember this rule: If you make more then $600 during 2008 through anyone you market for online, you will receive a 1099 in 2009 where you must report that income because your affiliate network already has done so to protect THEIR ass!
Hmmm…I wonder if you could possibly get 100 or more affiliate networks and make $599 with each one and not report the income????