Are any of you running your ads under a business? How do you guys file your taxes for your ads? I'm in Florida in the US so I file my federal taxes with no problem but when it comes to state filing it gets tricky. They really don't have a classification for running ads on a website so I'm having trouble picking a category that would be taxed at the correct rate.

Any help would be appreciated. Thanks

I thought Florida had no state income tax?

A Schedule C, Business income and expenses is the proper way to do both.

Thanks colbyt, I'll check into that. Florida doesn't have a state tax as it relates to personal finances, but businesses have to file taxes through the department of revenue. Anything you pay the state DoR is a write off on your federal taxes though. So at least you get something out of it.

The Fed does not really require you to file a C unless it is over $400 net. That is when the fica kicks in. For smaller amounts you can just call it misc income and I would not even bother with the state.

Do keep in mind all legitimate business expenses. You might be surprised how much you can write off.

Yeah, that was the whole reason I set it up as business income in the first place. Monthly hosting bill, domain registration, any computer expenses for the house, ink cartridges, etc, ALL write offs.

Last year I managed to write off annual passes to Disney since one of my sites has pictures of the parks and I need to get in to take pictures. It's amazing what qualifies as a business expense.