The first step in understanding taxes for affiliate marketers is to understand how affiliate marketers are paid, and how that differs from the way most Americans are paid. As an affiliate marketer, you are paid as what is known as a “1099 Contractor” for tax purposes. This differs than say, a cashier at a grocery store, who is most likely treated as a “W-2 Employee”. The key difference here is that contractors do not have any taxes withheld from their income by their employer (in this case, the affiliate network who writes your check), whereas the W-2 employee at a grocery store has the employee portion of payroll taxes withheld (Medicare and Social Security taxes, which amount to 7.65%), and another portion withheld for estimated federal and state income taxes, respectively. Although it may seem favorable that 1099 Contractors don’t have these taxes withheld from their checks, they still inevitably do owe taxes on their earnings. They are required to pay both the employer and employee portions of the Medicare and Social Security taxes in the form of a 15.3% “Self Employment Tax” and are required, in some cases, to make estimated tax payments to the IRS for their federal and state income taxes. Paying the self employment tax and estimated taxes to the IRS is the most common misconception or oversight amongst affiliate marketers, and often leads to year end surprises. To add an additional wrinkle, there is a common misunderstanding with respect to how taxes work for affiliate marketers operating as a sole proprietorship, LLC, or C-Corporation– which we will discuss next.
Creating an affiliate website from scratch can be tedious. This is because there are so many things that you have to consider. You need to create a registration page for your affiliates and create their own individual dashboard. You also need to create an admin dashboard where you can monitor how well your affiliates are doing. Add an online store to that and it is enough to drive you insane. Fortunately, there are some tools that you can use to set up your own site in minutes and that’s what you will learn in this course.
7. Repeat after me – “I have an ugly baby.” A lot of business owners love their websites, but the first step to improving your website is to admit that it has some deficiencies. No website is perfect, and every website can use improvement. If you have a website, you have an ugly baby [sorry]. Just how ugly your website is, however, is open to discussion.
When I first decided to start my own company and was looking into the different ways to make money online, I was shocked by the number of scams, so-called “gurus” and get-rich-quick schemes that were out there. I kept coming across company after company, website after website, promising to help me make millions online overnight. These “get-rich-quick” schemes were a huge turn off and made me think there was actually no legitimate way to make money online other than becoming a part of these schemes. It got so bad that I almost gave up and resigned myself to the fact that I’d never be able to start my own business and I’d spend my life working as a long-haul truck driver the rest of my life. If you want to read my full success story you can do so here.
The best potential of affiliate marketing is achieved by its integration into online marketing and coordinating activities with search engine optimization, search engine marketing, social media marketing, email marketing and influencer marketing. This chapter highlights approaches and strategies for both affiliates and merchants who want to use other segments of online marketing to boost the performance of their affiliate campaign.
The easiest thing to do is to sign up for an affiliate marketing network like Commission Junction. They provide a marketplace where your affiliate program will be advertised to other affiliate marketers. They also provide the tracking software for your affiliates so you don’t have to build your own tracking system. In some ways this is better because it takes care of the trust issues. Affiliates are always suspicious of whether or not they’re getting credited for the sales they generate. By having an intermediary take care of transaction tracking and payments, the fear of being cheated is alleviated.
George Brown, the creator of Google Sniper 3.0, created this e-course that shows you how to build very profitable websites in a short time, even if you’ve never done it before. With video and written lessons, he shows you exactly how he made more than a million dollars through internet marketing. The latest version, 3.0, has all the newest affiliate marketing techniques and tips, along with Google’s algorithm updates.
If affiliate marketing is simply a “side hustle” or something you do for fun in addition to a full time job, you most likely haven’t filed any paperwork to form a legal entity for your business. If so, you are deemed as operating a Sole Proprietorship for tax purposes, with all income from your affiliate marketing activities flowing through to your personal tax return on your Schedule C. This effectively means that any earnings from affiliate marketing are treated as earnings by you as an individual, and you’ll pay taxes on these earnings on your personal tax return.
I’d stick with Amazon if I were you. All of my Amazon sites only have Amazon affiliate links. If you use Google Adsense display ads on your site, you’re literally taking people away from your site for the sake of just a few cents with these type of ads. If you direct them just to Amazon, then you have a greater chance of earning more money from that click.
When the visitor clicks on this link, the Amazon.com web server is programmed so that the visitor will be sent to the webpage for the book with that ISBN number. At the same time my Associate’s ID will be recorded with the visitor’s session ID (an arbitrary number assigned to each visitor every time he enters the site), so that if the visitor makes any purchases on that session, I will be credited with their purchase.
The next platform, which has created a great community of affiliate marketers and is a fantastic resource for a versatile and step-by-step affiliate marketing training program is Wealthy Affiliates. Over the years it has become one of the most reputable and highest-rated resources to teach you the ropes of digital marketing and online business for someone who has no or very little experience in the online and blog world.