Taxes on an internet business with no profit?

Posted by admin on February 22, 2009 · 2 Comments

As a side job, I run an internet site. Eventually, I hope to have everything funded through donations, but until then everything has come out of my own pocket.

In any event, I didn't make a profit off of this site, but was curious if I still have to pay taxes on it. I'm also interested in whether or not running the site would qualify me for small business tax benefits.

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Comments

2 Responses to “Taxes on an internet business with no profit?”

v b says:

February 22, 2009 at 6:04 am

This hobby is just that a hobby.

Income goes on 1040, line 21.
Expenses, up to the income, goes on schedule A as a miscellaneous expense.
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StephenWeinstein says:

February 22, 2009 at 6:36 am

Since you do not intend to ever make a profit, it is a hobby, not a business. Therefore, you get no tax benefit.

If you do make a profit, you must pay tax on it.

Because you have no profit, you owe no income tax.

However, you may owe other taxes, especially if you have employees. If you have employees, you must pay social security, FUTA, etc.

Also, you may be required by state or local law to collect sales taxes from your customers and transmit that money to the state or local government.
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