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raindrop2309
Forums Member
Joined: 18 Jul 2008
Posts: 13
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#1 · Posted: 31 Jul 2008 12:32
Taxes on earnings from ASD
Because ASD is not offering securities this is how I would understand taxes on the income eared.
Lets say you by $50,000 in ad packages
After you receive your 125% for surfing you now have $62,500
This $62,500 is considered income by the government in the USA and Canada and will be taxed and the appropriate rate. (The whole $62,500 and not just the $12,500 as it is not an investment/security. You are not paying tax only on the $12,500 as this is not stocks, RRSPs, investments, securities of any kind.
At a tax rate of 15% of $62,500 that is $9,375 in taxes to the government
At a tax rate of 20% of $62,500 that is $12,500 in taxes to the government
At a tax rate of 25% of $62,500 that is $15,625 in taxes to the government
At a tax rate of 30% of $62,500 that is $18,750 in taxes to the government
You may not earn any money at all and if you do you could be paying a lot of tax on it.
Question: Does anyone know if this is true?
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hutch1c
Forums Member
Joined: 21 Jun 2008
Posts: 38
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#2 · Posted: 31 Jul 2008 12:35
I don't know exactly how taxes work with them but I do know that they don't count the original 100%.
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Caterina
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Joined: 14 Jun 2008
Posts: 128
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#3 · Posted: 31 Jul 2008 12:38
Your advertising money is a tax write-off, so you'd only be paying taxes on the $12,500.....at least, that's MY understanding....
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alasycia
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Joined: 4 May 2008
Posts: 287
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#4 · Posted: 31 Jul 2008 12:47 · Edited by: alasycia
Hi well I understand people liable for US tax will be taxed on the rebates paid to them and cashed out and received.
Non US members will be liable to the taxation relevant to the country where they have their tax liabilities
It will not be taxed as investment earnings as ASD does not sell investments.
If anyone can tell us correctly beyond this - it would be greatly appreciated.
Jenny
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iggyigette
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Joined: 27 May 2008
Posts: 482
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#5 · Posted: 31 Jul 2008 13:07
you will receive a 1099 Form of your total Cash Out - that is considered as Income - add that to your total income.
If you are buying Ad Package to promote your business...that would be considered as Business Advertising Expense and should be tax deductable as such.
Check with your accountant since I am not one.
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cory
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Joined: 28 Jul 2008
Posts: 10
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#6 · Posted: 31 Jul 2008 13:28
Why dont we ask the company itself on how our money is going to be taxed? Is it on the whole 125% or just the 25%. Anyone who's been attending regularly on the Q & A teleconference, Pls address them this concern and dont forget to update us here in the forum.
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iggyigette
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Joined: 27 May 2008
Posts: 482
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#7 · Posted: 31 Jul 2008 13:38
This has been brought up in the Q&A Sessions:
You will receive a 1099 Form for the money that you "Cash Out".
That 1099 is taxed as Income.
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mrich87
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Joined: 17 Jul 2008
Posts: 76
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#8 · Posted: 31 Jul 2008 14:16
Your initial purchase is deductible if you are a business, sole p., llc, inc., etc. If you aren't, spend the $50 (at least that's what it is in Michigan).
Your income received from ad rebates will only be taxed if you don't have other expenses against it - i.e., you can now write off your home office space, your internet, your toilet paper, etc.
As my father taught me a long time ago, you must always have a good accountant.
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mrich87
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Joined: 17 Jul 2008
Posts: 76
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#9 · Posted: 31 Jul 2008 14:20
cory: Why dont we ask the company itself on how our money is going to be taxed? Is it on the whole 125% or just the 25%. Anyone who's been attending regularly on the Q & A teleconference, Pls address them this concern and dont forget to update us here in the forum.
Hi Corey,
It's a fairly simple calculation really. You put money into anything (in our case advertising) and whatever money is generated and paid to the business is income that is taxable. Now, you use your income to pay other expenses, i.e. office paper, computer supplies, bottled watter for your office....
Really, you should get an accountant as they will know the rules in your specific state.
Mike
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alasycia
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Joined: 4 May 2008
Posts: 287
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#10 · Posted: 31 Jul 2008 14:20
Thanks Iggy and Mike
So in Summary US members will be taxed on their cash rebate cash out earnings as income (and the rest of us will be obliged to declare the same to our own tax authorties with our annual income tax returns)
And the Advertising purchases can be used as business expenses as can any other expenses of runnng our home businesses .
ASD are not responsible for us - but provide the necessary information to the taxman. As with any other income we receive, it is our reponsibility to comply the relevant tax laws.
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RickKelley
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Joined: 31 Jul 2008
Posts: 38
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#11 · Posted: 31 Jul 2008 14:30
So that is kind of a question I have. Is ASD considered a business? No, right?
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raindrop2309
Forums Member
Joined: 18 Jul 2008
Posts: 13
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#12 · Posted: 31 Jul 2008 17:40
Thanks everyone for your reply.
So then if you do not have a real business to right off your ad packages then all of your cash outs/ rebates from ASD will be taxed and you will loss money in the end. Right? As your ad packages would not be pre tax dollars so in the end you would just be paying taxes twice on the 100% you invested into ASD as ad package.
This must apply to most of the ASD members as most of my friends and I included do not have a business to right this off to or one that can right $30,000 off in advertising!
How many members do you think have real business and are not just advertising the current employers site (like I am) or a friends business? Based on the people I know in ASD I would say 80% do not have business.
Does anyone think there is a way around the tax issue so that I would not end up loosing money with ASD?
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dbmaxx
Forums Member
Joined: 10 Jul 2008
Posts: 56
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#13 · Posted: 31 Jul 2008 18:11
I would think that ASD is your business and you are the "independent contractor"/ sole proprietor if you are just doing this in your own name. I would write off the ad pack purchases as an operatiing expense against the earnings shown on the 1099. Would advise to talking to an accountant before taking that as gospel but it sounds very plausible to me.
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bluedog24
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Joined: 26 May 2008
Posts: 62
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#14 · Posted: 31 Jul 2008 18:24
Raindrop, are you implying that if you don't have your own business, that every day that you upgrade, you are going to get taxed on that?? That would be rediculous if it's true...people would lose more than they would take out...I hope that's not true...
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raindrop2309
Forums Member
Joined: 18 Jul 2008
Posts: 13
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#15 · Posted: 31 Jul 2008 22:37
bluedog24, yes that is what I am implying. When ASD pays us the cash rebates that is income even if you use it to buy more ad packages. Unless you have a business that you can justify large amounts of advertising to the government can you right off the ad packages. Otherwise it is income and that is what my problem is. You mite get off not reporting a small amount $1000 or less but we really should not.
This really sucks as now I will loose money.
dbmaxx, I don't think that will work as that is not a business. That would be like saying when I shop a members only box store that that is my job as I receive yearly rebate. So all the stuff I buy is a write off.
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bluedog24
Forums Member
Joined: 26 May 2008
Posts: 62
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#16 · Posted: 1 Aug 2008 00:03
wow, I really hope this is not true...you're making me nervous now...
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hammerx3
Forums Member
Joined: 31 Jul 2008
Posts: 27
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#17 · Posted: 1 Aug 2008 00:20
Hi everyone,
I seem to remember reading about the taxes in the FAQ section on ASD, but since I can't get to that right now, I can't verify it. If my memory serves me right, it said that you would be taxed on any rebates over the 100% of your ad package purchases. I'll check it out as soon as I can look at the FAQs again.
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rippinrod
Forums Member
Joined: 29 Jun 2008
Posts: 24
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#18 · Posted: 1 Aug 2008 00:29 · Edited by: rippinrod
Hey everyone,
The way I remember it, and correct me if I'm wrong, is that ASD will only report on 1099 on the cashout over 100% of ad pack purchases.
Although, I would heed Iggy's post before mine...I'm thinking we all have businesses that need to deduct advertising expense, right?
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Louminous
Forums Member
Joined: 9 Jul 2008
Posts: 19
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#19 · Posted: 1 Aug 2008 01:38
For those that don't personally have a business to advertise and are promoting someone else's site, here is a suggestion... think like a businessman (or woman).
You are basically providing that particular site with a service, which is advertising... Companies usually hire a ad agency or pr firm to do this, if they are small they may hire an independent contractor, charge them whatever you want for your services which could be free. You are creating impressions for that business, in advertising impressions are how many people are reached for your services, ie. a promotion, ads on tv, radio, billboards or through ASD. Whatever you spend to get those impressions is an expense for you and a write off, most companies in return bill the client which would be profit (you may be providing services pro bono but you still have an expense). So if your in ASD and are advertising someone else's business, look as yourself as a independent ad agency.
Either use your own ss# or get a ein# and definitely speak with a accountant like people suggested. Alot of you were never entrepreneurs, well you are now so get creative  thats what business is all about.
Just my two cents...
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raindrop2309
Forums Member
Joined: 18 Jul 2008
Posts: 13
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#20 · Posted: 1 Aug 2008 09:38
This is was the ASD site said about taxes back in December 2007:
"26. Will my rebates and referral commissions be taxed as they are accrued or paid?
No. If you are a U.S. resident or business, we MUST have your SSN or EIN number on file before we pay you the leadership bonus. You will receive a 1099 at the end of the year showing the total leadership bonus you have been paid but your 100% rebates will not show up on your 1099.
"
That is good to hear but wrong on part of ASD as once again they are not selling investments or securities. Only on those type of "investments" do you only pay tax on the profit.
So far from my understanding on this forum is that if you do not have a business registered with the government go get one now so that you can right off your ad packages. Get a creative accountant to do up your books so that you can get around this big tax issue that most of us will be facing.
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