How do I set up adsense and taxes for my blog?

Posted on 2011-03-24
Last Modified: 2012-05-11
I have my WP blog ready to go live, -Godaddy - except for adsense and Business registration.

Do I even need to bother with sole proprietorship if I just pay my taxes on my Adsense income on my 1040? or does sole p offer me advantages?

Anything else I should know about this?
Any possible mistakes?

Question by:beavoid
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LVL 29

Accepted Solution

coreybryant earned 500 total points
ID: 35217140
Comparing an LLC to a Sole Proprietorship and a Partnership.

Usually with a sole proprietorship, one can use his / her SSN without the need of an EIN.  If your earnings are not that much, you can always just start off with the sole proprietoship and the move over to an LLC.  If you do get an LLC, you will need to determine what state you want to file in.   I used a website to help me create the LLC, I think it was about $100.00.  I registered in CO (since that is where I am).  In December, I received a postcard from the Colorado Secretary of State to file a business periodic report (I think that was about $10-$15).

If you have a company / CPA doing your taxes, you should call them and see what they recommend.  They can look at your financial situation and suggest the best for you / your business.  

I chose an LLC to make it easier to transfer ownership when the time comes.  

Author Comment

ID: 35220070

Do I even need to bother with LLC and Sole P ?

My site (blog) might not earn much. In that case, can I just do it as individual income on my 1040? and branch out later, if necessary? How complicated is Adsense payment? Don't they just mail you a check?

I doubt I'll ever need to transfer ownership, but I'll keep that in mind.

Do I have to make these decisions right now, if my site is just past square zero in development?

LVL 29

Assisted Solution

coreybryant earned 500 total points
ID: 35222192
Personally, if it was just adsense income, then yes, I would just use my SSN and accept it as individual income.  

I guess one thing to consider - just make sure you abide by their TOS.  If something were to happen and they terminate your account, you might have problems getting a new one.  I have never had a problem with Adsense myself.  If I remember correctly, they have a place somewhere to enter your IP address so clicks from that IP address do not count.  I did have this URL bookmarked that might help some with that issue Invalid Clicks and Concerns.  It's just like any business, you need to see who is minding the store.  When I first started, I looked at the clicks every couple of days.  It is a good idea to look at the clicks anyway - see what is working / what is not working.  

As far as making that decision now, I would say no - you do not.  

I think they will mail you a check, but my payment is sent directly to my bank account (EFT - Electronic Funds Transfer).  If you choose the check option, it might take up to 2-3 weeks more, so you might have to wait almost two months to get your income (once you get $100 or more).  

To have Adsense deposit money directly to your bank account is easy.  It basically consists of four steps.  
(1)  You enter the Routing and Account Number to your bank account.  
(2)  They deposit a little, let's say $0.27.  
(3)  Once you see a payment from Adsense, you sign back into Adsense and enter that amount.  The amount differs but is usually less than $1.00.  This basically helps to confirm it is your checking account and you have access to it.  It is actually easier to withdraw money from a checking account that deposit money into it due to the Federal regulations.  It usually takes less than 10 days.
(4)  Once you see a Adsense deposit, you sign back into your Adsense account to enter that amount - this helps to verify you are the owner and have access to the account.

If you have questions relating to the Routing Number and Account Number, you should contact your bank.  The Routing number is found at the bottom of the check and is usually 9 digits.  A few banks have different rules and the Routing number on the check could be different for EFT.  If you do go this way, I would recommend calling them just to confirm or you might be able to sign into their website to verify as well.
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Author Comment

ID: 35222624

Yes, I'd heard about the IP click avoider. Is it just IP Address it checks for, or is it specific computer?
I also am aware of the very strict guidelines. So, if I register hits on my Macbook at one location, and then also from a different location on the same Macbook, will that sound sirens?

I am relieved you suggested personal SSN for my Adsense income. When I was doing another site, I did the LLC thing, and it was not a walk in the park, and possibly, unnecessary.
I'm much happier with simple SSN. Then it is just an individual income declaration, no LLC forms. Simpler 1040 tax. I am going to get Adsense to pay my mom at first, for my own reason. If I want to change payment to my brother, is it simply just name / address text fields in their form?
When do they send the checks, monthly? at a certain balance, when called for?
LVL 29

Assisted Solution

coreybryant earned 500 total points
ID: 35222739
As far as registering your Mac, etc I am not too certain how that works.  I have not been through it in a long time, but if you go into your Adsense and click help - it takes you to their own forum.  You can search their forum and post specific questions.  I found this helpful when I was setting up a Google Voice number.

Yes, you can change it but it might raise flags, especially if you are around $600 - this is the amount a contractor is require to submit to the IRS, and you will be given an 1099.  This might cause your brother / mother tax problems when tax time comes, depending on how much they earn.  I have seen this happen more often - just a few hundred dollars earned and the individual is moved to another tax bracket.

"When do they send the checks, monthly"
They will mail you a check once you get $100, but my payment is sent directly to my bank account (EFT - Electronic Funds Transfer).  If you choose the check option, it might take up to 2-3 weeks more, so you might have to wait almost two months to get your income (once you get $100 or more).  

Author Comment

ID: 35222897
My parents do their taxes together,

but my mom doesn't work.

That might help simplify everything.

My dad does his or the "family" (his taxes)
I do mine for myself.
Then, my mom does one from the Adsense.

So, where do I set my mom's Adsense account up?
Any snags to keep in mind?
My Godaddy web-space is in my name,
but the Adsense will be in my mom's name. I can't see any problems there? Why would they care?

LVL 29

Assisted Solution

coreybryant earned 500 total points
ID: 35223550
So, where do I set my mom's Adsense account up?
Go to - it will be tied to your Google Account.
Any snags to keep in mind?
As I said before, this depends on their tax brackets.  You need to talk to them about this.  Maybe I watch too many court TV shows, but allowing anyone else to use their own SSN is risky.  Usually, the only other person that one will share their SSN with is their partner.  
Then, my mom does one from the Adsense.
I don't understand, when one does their income tax, they do either for themselves / partner (family) and maybe one for their business.  Unless this is your mother's business.  And if it is, you have to speak with her if you are giving Google her SSN.  

And I recommend that she set it up.  Once it is set up, she will go to My Account - Account Access.  This is easier to explain once you sign up.  This way, you can see this as it goes along.

Re: GoDaddy / AdSense, this does not matter - since you can put AdSense on other websites that you have access to.  

Author Comment

ID: 35228921
wow, you guys, thanks so much,

Approved within about 30 mins.
I was astonished.
First time I tried this, I had a clownish, pitiful website, that I didn't even get a reply about, but as soon as I had something serious, that was well formatted, had serious images and content, it was a walk in the park. I have many other cunning plans.

Thanks so much.
I somehow initially felt this wouldn't happen, but with your help, no problem.
LVL 29

Expert Comment

ID: 35233138
Glad to be of help - good luck with the site!

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