vBulletin as a business?

[tedology]

Hello all,

I apologize if this is not the correct forum and kindly ask the moderators to move this thread to the appropriate forum, should that be the case.

My site is growing rather quickly... quicker than I anticipated in fact, and some users are asking if they can donate money to the cause.

So I got to thinking about putting up a "Donate" Paypal button... but then realized that would be considered income. Which means I'd have to pay taxes on it, yes?

Then I thought more (dangerous, I know!) and thought that if I ever want to create "subscripton services", that, too, would be income.

I'm wanting to hear from some veterans who have successful sites who charge their users a fee?

Do you have to get a business license? Register your site's name? Create a separate bank account and such?

If there is an article or someplace on the web I can find these answers (and more!), I'd greatly appreciate it.

Any information you can provide would be helpful. I've thought about meeting with a tax professional to find out my options so I don't do anything illegal.

Thanks for your help!

Ted

[Videx]

You are correct, you must report your board income as your own, and pay taxes on it. Eventually you may want to start a business and make the board a part of that.

Depending what your board is about, you may be able to start a non-profit or even a 501c3 charity. But then you'll never be able to profit directly.

[tedology]

Hi Videx and thank you very much for responding.

Do you happen to know then... if we can claim our board expenses as write-offs?

[Videx]

Although I got roped into being the treasurer for our 501c3, as well as the super admin, please note I am in no way any kind of expert at this.

But yes, I would certainly think you pay taxes on profits, not gross revenue!

[tldagent]

Originally Posted by tedology

Do you have to get a business license? Register your site's name? Create a separate bank account and such?

If there is an article or someplace on the web I can find these answers (and more!), I'd greatly appreciate it.

Any information you can provide would be helpful. I've thought about meeting with a tax professional to find out my options so I don't do anything illegal.

Thanks for your help!

Ted

Ted, good question. Whether it's a forum or a small business venture, profit is profit no matter where it comes in from. If you are to get serious about this and plan to make money online with forums or website then I'd recommend creating an LLC. This is a limited liability company, (separate entity) that you can use for your business income. Likewise you can use it for business expenses. You'll want to get quickbooks and make sure you get an EIN Number, (comes with the llc) and is basically a separate entity, providing insulation from personal assets but not a full blown S corp and taxed more like a sole proprietorship.

An LLC is a separate entity. It has it's own social security number, (EIN) and is it's own identity. You would simply be an officer of the LLC. Income the LLC makes would not necessarily be income you make. It's like having an 'S' Corporation but not being taxed like one while protecting your personal assets.

Your hosting is an expense, software an expense. Your income would be donations or possibly more and your personal money is separate from your business income. You'll have owners equity or investment and owners draw, (which is the money you take out). This can be set up in a program like quickbooks... EASY.

Take it easy, don't sweat it. If you don't have a business then any income receive should be claimed as, 'Other Income', (if not LLC). It's not a big deal, ask for advice or tips and you'll find that many people are willing to give. Starting out, don't worry to much. You can accept up to $xxx without taxation as casual income in many states in the US. After that you "SHOULD" report it. If you plan to make more or go into business, the go for the LLC which will cost under $200 in most states.

If you need assistance, just ask.

[tedology]

Thanks very much for answering, Justin... I appreciate it!

[TalkVirginia]

Correct me if I'm wrong, but I was reading somewhere that you have to pay tax on anything over $600 (after expenses are taken out) in the US.

[Videx]

Not true. Most states have both sales and corporate income tax which are supposed to be paid regardless of the amount.

But there are special rules for legal non-profits and yet more rules for legal 501c3 charities. I believe the current ceiling is $15k USD federal and $10k in our state - as long as we don't raise more than that we don't pay taxes. But we still have to file a federal e-postcard yearly.