Tuesday, March 23, 2010

«Master Marf is a Business»

So I just learned something shocking. I had enough income in 2009 on my taxes from the ads here that Master Marf has become a business in the eyes of the IRS. For last year's taxes it was just a hobby. Somehow since then I've become a self-employed business owner. I'm such a ninja at getting a job even I didn't know I had one!

I started doing my taxes with the TurboTax program. When I entered the information from my ad income, it said I had a business; it wanted to upgrade to the business edition (for a fee), and started asking questions about my "business". So I got confused and decided to see a tax consultant, I went to Liberty Tax Service here in Ketchikan.

It was explained to me that when you start getting 1099 forms listing "nonemployee compensation" in box 7, you are in fact self-employed. And that I do in fact, have a business as far as the IRS is concerned (even though I don't have a business license).

The downside is business tax forms are much more expensive to have done, either by a tax firm or program like TurboTax. Also I have to pay Social Security and Medicare costs out of my "business" income. However, because it was my first time using Liberty Tax Service, and my taxes were so simple, they were nice enough to give me a voucher that made my tax preparation free this year. Otherwise I'd of had to pay a $224 charge for being a small business. Ouch!


  1. Whoa. Nice. Good to know you finaly have a job.

  2. lol yeah. you have the job of the american dream. you are youre own boss, doing something you love. gratz!

    - Six Legions

  3. @ Six Legions: Maybe if I made a little more from it... It was less than $1,000 all year.

  4. The business registration fee here in California is $800. Make a few paperwork mistakes and you could be up to several thousand dollars!

  5. You can make money from those ads?

  6. @ Berni: Yes, I do. Sometimes I can get a few cents every 1000 times the ads are loaded (these are called impressions), but where I get the most is when they are clicked.

    Depending on the ads, I can get close to $2.00 for one click. Just today I've have one ad unit that's had 26 impressions and 1 click, and so far it has been worth $1.37 to me today. That would be the ad unit that shows up when you use my custom search engine in the sidebar... Someone must have had a good keyword in their search term, then clicked an ad.

    But that's not typical. I have another ad unit that's had 681 impressions and 8 clicks, and it's only been worth $0.24 today. Or others that have had around the same impressions, but only 1 click and are worth $0.02 so far today.

    And I must state I'm not encouraging anyone to needlessly click on random ads for my benefit. It against the ToS for me to encourage or reward people to click on my ads. Also, Google has some pretty sophisticated algorithms to detect multiple fraudulent clicks; so I wouldn't get anything from it anyway.


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