Affiliate Income and Tax Returns

[gazza]

Hey,

I'm no longer a newbie but it is time to fill in my first tax return (for 2007) here in the UK. I've been recording my income in a pretty basic fashion : money in is when I cash a cheque that I recieve from a sponsor, money out is when I use my card to pay for a webhosting bill or to purchase domain names.

Is this how it is generally done? Is is sufficient to record the cheques that I have cashed in the tax year, or should I be including every sale that shows up on my sponsor stats?

[balls_deep]

Originally posted by gazza
Is this how it is generally done? Is is sufficient to record the cheques that I have cashed in the tax year, or should I be including every sale that shows up on my sponsor stats?

you are using a cash accounting method which means that money received is income. Anything you spend that makes you money should be taken off your bottom line.

If you haven't received the check yet then how do you know that you will even get it? If sales are sitting on a sponsor waiting for a minimum payout, you haven't made that money yet.

At least that's how i do it here in the states.

[gazza]

Thanks for the reassurance Balls, now I can breathe easy. It really was something that was starting to worry me a little.

[Latinluvin]

Yeah I use the cash method too. I really need to get more organized when it comes to book keeping though. I just have two folders. One for income and one for expenses. And when tax time rolls around, I bust out my handy printing calculator to total everything up. Although I guess you could just tally everything in an Excel speadsheet. Kinda half assed but it gets the job done.

Just out of curiousity. Does anyone in here use a real accounting system ie: credits, debits, cash, expense accounts, ledgers, journals and all that other stuff you learned in accounting 101.

[gazza]

Just out of curiousity. Does anyone in here use a real accounting system ie: credits, debits, cash, expense accounts, ledgers, journals and all that other stuff you learned in accounting 101.

I think you are supposed to keep all that stuff, but it only becomes an issue if they ask for it (i.e. for an audit check).