New to domaining - Taxable when?

[ce77]

I am new to domaining. I have a few registered domains. I feel this may have potential to take off as a small side business if not eventually a sole source of income in the future when considering many revenue generating options. Honestly, when do most serious domainers start paying taxes so that uncle sam doesn't come knocking on their door? Any tips or advice?

 

[nielsencl]

I don't know what most domainers do, but when you earn a profit, you should be reporting that for the correct tax year.

The nice thing is, that even if you are NOT making money, you can start deducting any expenses you may have that relate to your "business". The list might include:

Your computer(s) and accesssories
Internet access
Domain registrations and renewals
Magazines, music, movies, books, and other domain research materials

You should talk to a tax person to find out all the details, and you might want to save the records for the time when you sell something to help with the taxes, if you can that is.

It used to be you could start your own business and "lose" money for 3 years before you had any problems with the IRS, since they know it make take a while for a business to start showing a profit.

But since you are new at this, you'll want to make sure you really can earn some money before putting too much into the business. Domain buying can be addictive. I know since I have about 260 and now really think hard about buying any more. I'm passing up on a lot of domains until I can get some money back by selling some of my domains and sites.