Do I need to pay taxes on money from my website that goes directly to helping keep the site running?

by Chad Schweighart, CPA | Jun 13, 2019

askacpaicon
I own a small website that posts news articles and serves as a forum for people who work out. It’s not a business, but to help with keeping the website running, I have an option for people to pay $1 monthly or $10 annually for more access to things on the forum. There are no transactions other than the $1/$10 payment for access to this section. Since all the money goes directly to helping keep the forum running, do I need to pay taxes on that money?

Any income is to be reported on your various income tax filings. Since this is a website that you are running, you should have established an employer identification number (EIN) for this business.  Once that is done, then you would report the fees as income, and you can deduct any expenses you have incurred such as hosting fees, design fees, etc., against that income to get to a taxable amount. If the net income is less than $400, you will be exempt from self-employment taxes on your 1040, but you will still have the income tax to account for. You will also have state and local taxes that could be applicable as well. 

I suggest consulting with a CPA or licensed tax professional for additional advice. 

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Chad Schweighart, CPA, is an accounting manager with Gift & Associates in Mechanicsburg, Pa.

Disclaimer
The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
Ask a CPA

Search the most frequently asked finance and accounting questions and read the responses from PICPA members. Always consult a CPA before taking action.

Search