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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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How will I file this into my taxes

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I am working with IFW's - incentivized freebie websites. Basically, what i do is. i pay people to go to a site under my referral link - so i get credit for it. and they complete offers. when they finish, I then pay them money via paypal. after that, that site pays me money for referring that person. for example: i have a site and i have some go there and do offers, and i pay them $20. i turn around and cash in, and the site pays me back $40. there i just made a $20 profit. at the end of the year, i will get a statement showing what i made from the site. do i pay taxes on the $40? and can I use the $20 as my expenses? how will that work exactly. I am not a business, its just me! help me!


You should get a 1099 form at the end of the year from the website that is sending you the money. You will report that income on Schedule C for self employment, and file that schedule with your tax return. You may also take deductions on Schedule C against this income, for expenses that you incur in relation to this income. So you would be able to deduct the money that you have paid to the referrals through PayPal. It does not sound like this is a situation where you are paying any one individual more than $600 per year, so you would not need to send them any 1099 forms. However, you should keep a clear and detailed record of all the payments you made, who you paid them to and the date you paid them, just in the event of an audit. After deducting these referral payments from the income you received, you will then owe taxes on the difference. You may, of course, also have other expenses to deduct in connection with this business, such as office supplies, computer supplies, or other items you may purchase for use in this business.

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Merlo and 3 other Tax Specialists are ready to help you
Customer: replied 9 years ago.
so this is ok, even as an individual. im not a business! so will that have any affect on it.

Hello againCustomer

No, it will not change anything at all that I told you. Schedule C is mostly used by people in your exact situation, where they are earning money from some sort of side business, even though they are not formally set up as a business entity of any kind. You could be selling goods at a flea market, or items on Ebay or anything that had to do with making a side income, and this is the form you would use to report it.

If this was helpful to you, please press the "Accept" key. Positive feedback is also greatly appreciated.

Thanks again.

Customer: replied 8 years ago.

My hubby has his own business and works for someone now, his accountant he uses for his business also does our personal stuff too. My hubby currently claims myself and our kids, and we filed jointly. Is it possible for me to file my work as previously talked about on my own or does it all need to be done together? Can we still file jointly and I do mine seperately, or how would that work?

Please advise!