Internet Marketing with Josh SpauldingMaking Money through Ethical Internet Marketing.

26 comments

1. Matthew Lord (4 comments.)
   11th November, 2010 at 7:38 pm 

   Josh,

   While everyone should report all earnings it is still very nice of you to share this information.

   One of the main reasons I follow you and trash most other IMers is because you are ethical. Perfect name for your blog.

   Keep it up!

2. Lisbeth Tanz (1 comments.)
   11th November, 2010 at 7:39 pm 

   It was only a matter of time. No surprise – everyone’s scrambling to make money – even the gov’t. Thanks for posting about this.

3. Corin Zander
   11th November, 2010 at 7:42 pm 

   Thanks for the heads up, Josh!

4. Learn to be a Tutor (1 comments.)
   11th November, 2010 at 7:50 pm 

   Hi Josh,
   This is a good reminder. I, too, claim all my earnings and I think that honesty keeps us in business. Thanks again for sharing your insights.
   Peggy

5. Herschel Lawhorn (8 comments.)
   11th November, 2010 at 7:59 pm 

   Like Matthew Josh, This is one of the reasons I always read your stuff and follow closely what you say.

   You come up with things that we need to know and probably wouldn’t have found on our own.

   Thanks again for the heads up.

6. Joseph Ratliff
   11th November, 2010 at 7:59 pm 

   Josh,

   Good note dude.

   For those who haven’t already, I recommend subscribing to IRS E-news For Small Business at:

   http://www.irs.gov/businesses/small/content/0,,id=154826,00.html

   They released this information a little while ago, and the include some helpful tax information within this newsletter.

7. Honesty in IM | anotherinterestingday
   11th November, 2010 at 8:01 pm 

   [...] Josh Spaulding, the ethical internet marketer, has a blog post informing us that the IRS will now require paypal [...]

8. Passive Income Strategies
   11th November, 2010 at 8:04 pm 

   It makes me cringe to think that people try to scam the US government. You will get caught – it is simply a matter of when. Do yourself a favor and pay taxes on all of your income!

9. Kindergarten Worksheets
   11th November, 2010 at 8:18 pm 

   Yes…it is always wise to present ALL your earnings to the government.

   Never take any chances with hiding any of your earnings–you can be sure eventually that will catch up to you if you are hiding money.

   It only makes sense….

10. Dwight @ Financially Elite Blog (12 comments.)
    11th November, 2010 at 8:19 pm 

    I’ve been reading this day was coming for a while. Josh what’s your strategy on this, keep your paypal in a separate bank account and report those earnings?

    What i’ve been curious about is say you have a huge surplus of transactions for paypal in let’s say a given quarter, how do you treat those refunds that may come up throwing your earning disclaimer off (as you’ve possibly just reported more income than you earned because of the refunds)? Curious to know as I get more cheques than anything but switching to the paypal method fairly soon.

    Dwight Anthony

11. Mauricio
    11th November, 2010 at 8:53 pm 

    What about the ones who use clickbank for processing sales transactions?… and what about the non-residents?

12. Josh Spaulding
    11th November, 2010 at 9:05 pm 

    @ Dwight – My strategy is to do what I’ve always done and just report everything I earn, whether it’s from PayPal, via check or any other way.

    Eastimated quarterly reporting is just that: estimated. If I process refunds for sales made in the previous quarter those losses go into the current quarter.

    @ Mauricio – Clickbank has always required tax forms. They already report to the IRS. Not quite sure about non-residents.

13. Gary Lambert
    11th November, 2010 at 9:31 pm 

    That is good to know

14. Chris
    11th November, 2010 at 10:57 pm 

    I know this was coming. Now PayPal have a new scapegoat when they raise their fees.

15. Jim
    11th November, 2010 at 11:02 pm 

    Josh:

    As always, good and timely info.

16. Angie Berg
    12th November, 2010 at 12:54 am 

    Thanks for that. I hadn’t heard this latest news.

17. Paul (3 comments.)
    12th November, 2010 at 12:56 am 

    Josh, Seesh of course I report ALL earning. Even one lousy dollar. I will NOT mess with the IRS.

    Paul

18. Latha @ my online income system
    12th November, 2010 at 3:59 am 

    Josh,
    Thanks for sharing. If you are from India it is mandatory to link your paypal account with a number called a PAN card number. PAN no identifies you, like an SSN would, but I guess its more related to finances.
    So every dollar you get or send is reported I think.
    I have to speak with my accountant this year on the impact it would have on my tax returns as this is a new feature.
    I think it was added a few months back.

19. Jim
    12th November, 2010 at 11:19 am 

    It has been the ambition of my life to owe millions in tax. Think how much there would be left.

20. Robin Murray (6 comments.)
    12th November, 2010 at 2:59 pm 

    Thanks for posting this Josh. This won’t hurt anyone who was claiming the income anyways. Those that don’t are just shooting themselves in the foot by not reporting. As we are all in business, in some shape or form by doing IM, it should be important to report income as well as expenses so that we can use all the deductions that are rightfully ours.

    Not sure how it is in USA but here in Canada If you claim too many expenses for a number of years without claiming income (or very little) then the tax man is going to come-a-calling at some point and do an audit. Those that don’t claim either are just missing out on one of the best ways to reduce the taxes that they pay.

    Best thing to do is get a good accountant and be honest about all of your income and expenses so that they can find you every deduction that is owing to you. The few dollars that it costs to hire an accountant will come back to you many times over. I happily pay mine and he gets me business deductions that I had no idea about.

    Have a great day,
    Robin

21. Internet Specialist Mark (10 comments.)
    12th November, 2010 at 5:07 pm 

    Hey Josh

    The fact that you have to mention this on your blog shows that no matter how “ethical” we all claim to be, sometimes something may slip and bringing our attention to the current state of the industry is what makes me come back here often

    As you and the other commenters have stated, we too have always claimed what we have earned to the IRS. To be honest, I always assumed that Paypal reported these things so this definitely is news to me!

    Thanks for making us all more aware of the situation.

    Sincerely,
    Mark

22. Fran Civile (6 comments.)
    15th November, 2010 at 6:33 pm 

    Thanks Josh,
    I appreciate the information … I’ll gladly share my income … just wish I had more of it!

    Fran

23. Peter Claridge (7 comments.)
    26th December, 2010 at 7:46 am 

    I’m a UK taxpayer and even though my online income is a side income I always report my earnings each year, even though it doesn’t take me over the tax threshold. One thing I’ve never been able to work out is how to declare earnings in a foreign currency, for example in PayPal 99% of my transactions are in USD and obviously I report my income in GBP, but there is no option to state how much in a foreign currency you’ve earned!

    Filing taxes for your online income can be a bit tricky because you don’t know how to classify it, which I assume is one of the biggest reasons people don’t do it.

    Peter

24. Well
    28th December, 2010 at 10:34 pm 

    Sounds like a lot of bureacratic nonsense when I sell only used goods and they will try to bill me as if I profited? I don’t have any receipts from when I originally purchased the merchandise… so then what? Selling used goods I paid more for is not profiting.

25. Zorg
    15th July, 2011 at 1:26 am 

    IRS can’t go back more than 3 years. The statement (they often look back 5 years or more!) is misguided

26. Brendan
    16th August, 2011 at 6:17 pm 

    They can go further back if they believe fraud has been committed