Has anyone thought or done it? Register with the Finance/business dept of your city and file tax for your business? Pro/con?
If you have a commercial site that makes money (other than donations), then by law you need to register it. If you only take donations, then you need to file your (incoming) donations in your own personal taxes.
It actually depends on where you live and all. For example, here in SC you can make $x amount before you'd get in trouble for not paying taxes - I think this holds true at the Federal level. I know it's in the $100's range, and I'm wanting to say $700 for some reason. The IRS is not going to hunt you down if you're not reporting a few bucks on a hobby forum. (Note my disclaimer, this does not encourage nor give you reason to shirk the IRS.) If you conduct business in town here, then you need a business license. Yet you don't need it if you live in a rural area. So it just depends, you'd need to investigate locally to see what you would need and all. If your website is making serious money via any means -- banner ads, Google ads, etc. included, then you need to register/pay taxes to be safe. I think with the current climate, it's best to be cautious and not get yourself in trouble from the start if there is a chance of it.
My accountant told me anything under 600.00 is fine. But once you pass that you will need to start reporting it..,they told me the advertising group will automatically start reporting it as well. So the IRS will know about it anyhow.
Wrong This is correct, though you really don't NEED to "register" as long as you keep your taxes up to date and everything documented.
That's it then, good professional advice there. I neglected to mention that last little caveat. Worst case scenario, you basically report it as 1099. As twhiting said, you don't necessarily have to register as a company, but it can be a good idea to protect yourself. I'm afraid we might eventually see the day where forums become hot legal targets. I pray those days never come, though. (And that is really another discussion for another topic as well, I suppose.)
