How to handle taxes related to affiliate marketing?
Is it right that I request form W-9 or form W-8BEN (for non U.S.   citizens) from the affiliate users before sending them payments? Not just OK. Required. I know that I have to send form 1099, but I don't know where does this   form should go to. Should I send it to the IRS or the affiliate user   or both? Both. There's also form 1096 that you need to send to the IRS.  Read the instructions. Should I send form 1099 once a year or each time I make a payment to   the affiliate? Once a year. Read the instructions. Do I have to send form 1099 when the money earned by the affiliate hit   a certain threshold or I have to send it anyway? $600 or more requires the form, but you can send for any amount. Read the instructions. Is there any other forms or documents to request from or send to the   affiliate user or the IRS? There may be additional forms. Especially if the recipient is a foreign person and you withhold taxes. Talk to your tax adviser.
So working at a cafe doesn’t mean you will learn everything you need to know to run a cafe. Are you being exposed to how the finances/taxes/food regulations are handled?  How about ordering/managing supplys?  How about employee management?   They aren’t gonna teach you all of that in business school probabably either but they will teach you stuff you didn’t know you needed to know.   I say skip school but realize it comes at a cost too. It's not just the US based mailing address for registration or US based credit-card or bank account: even if you had all these, like I do, you will find that  these online filing companies do not have the infrastructure to handle non-resident taxes. The reason why the popular online filing companies do not handle non-resident taxes is because: Non-residents require a different set of forms to fill out - usually postfixed NR - like the 1040-NR. These forms have different rules and templates that do not follow the usual resident forms. This would require non-trivial programming done by these vendors All the NR forms have detailed instructions and separate set of non-resident guides that has enough information for a smart person to figure out what needs to be done. For example, check out Publication 519 (2011), U.S. Tax Guide for Aliens. As a result, by reading these most non-residents (or their accountants) seem to figure out how the taxes need to be filed. For the remaining others, the numbers perhaps are not significant enough to justify the non-trivial programming that need to be done by these vendors to incorporate the non-resident forms. This was my understanding when I did research into tax filing software. However, if you or anyone else do end up finding tax filing software that does allow non-resident forms, I wil be extremely happy to learn about them. To answer your question: you need to do it yourself or get it done by someone who knows non-resident taxes. Some people on this forum, including me for gratis, would be glad to check your work once you are done with it as long as you relieve us of any liability. Yes you can do this yourself.  I cannot speak for all the credit repair companies, but generally they are not reputable.  Even if they are trustworthy, they cannot do anything you cannot do yourself. Freeze your credit.  Lock it down and prevent any new activity.  This is for safety and I want you to do it so you know where you stand. Get a copy of your free copies of the three credit reports from https://www.annualcreditreport.com/ (this is the only free, official place to get your reports) Sign up for a free credit score estimation site like http://www.CreditKarma.com or http://www.CreditSesame.com  (These sites make money by selling affiliate offers, but you can easily ignore them)  You can't get your exact FICO score, but they letter grades they provide help you understand where you stand. Dispute anything that is not accurate.  Get wrong items corrected with the credit agency. Ignore collectors who are not showing up on your report.  If they aren't reporting you, so what?  Let your own moral compass be your guide if you pay those debts or not. Negotiate a payment amount with the debtors you owe.  If you are dealing with a debt collector, there isn't any point in paying the full amount.  You owed the money to somebody else, and they sold it to the debt collector, therefore in my mind they are as whole as they feel like being.  It is up to you how much you pay, but you are already going to suffer  (and have suffered) the credit ramifications.  No sense in wasting money when they will very likely settle for dimes on the dollar.  Don't let them bully you around.  I suggest understand your rights and protections as offered by the Fair Debt Collection Practices Act Before you pay anybody anything, get it IN WRITING Wait and follow up.  Make sure they report it correctly. I would probably tackle them in order of age, newest first.   Don't bother with debts that are more than, or nearly seven years old.  Anything that old is or will fall off of the credit report soon, and your score will start to rise.  Paying on those debts will refresh them and they will harm you longer.  We can debate the ethics of that advice in the comments, but if you want your score to raise, I suggest just waiting about anything over six years old while you tackle the newer ones. This is a SLOW process.  Your credit score will still take a couple years to heal once you fix your report.  But that is the point of the score after all.  It is a history of how you handle money and debt. Don't let tax considerations be the main driver. That's generally a bad idea. You should keep tax in mind when making the decision, but don't let it be the main reason for an action. selling the higher priced shares (possibly at a loss even) - I think   it's ok to do that, and it doesn't necessarily have to be FIFO? It is OK to do that, but consider also the term. Long term gain has much lower taxes than short term gain, and short term loss will be offsetting long term gain - means you can lose some of the potential tax benefit. any potential writeoffs related to buying a home that can offset capital gains? No, and anyway if you're buying a personal residence (a home for yourself) - there's nothing to write off (except for the mortgage interest and property taxes of course). selling other investments for a capital loss to offset this sale? Again - why sell at a loss? anything related to retirement accounts? e.g. I think I recall being able to take a loan from your retirement account in order to buy a home You can take a loan, and you can also withdraw up to 10K without a penalty (if conditions are met). Bottom line - be prepared to pay the tax on the gains, and check how much it is going to be roughly. You can apply previous year refund to the next year to mitigate the shock, you can put some money aside, and you can raise your salary withholding to make sure you're not hit with a high bill and penalties next April after you do that. As long as you keep in mind the tax bill and put aside an amount to pay it - you'll be fine. I see no reason to sell at loss or pay extra interest to someone just to reduce the nominal amount of the tax. If you're selling at loss - you're losing money. If you're selling at gain and paying tax - you're earning money, even if the earnings are reduced by the tax. You should consult a US CPA to ensure your situation is handled correctly.  It appears, the money is Israel source income and not US source income regardless if you receive it while living in the U.S. If you file the correct form, I suspect the form is 1040NR and your state form to disclose your income, if any, in 2015 and 2016, it should not be a problem. Having said that, if you do earn any type of income while in the U.S. , you are required to disclose it to both the IRS and state. "What would be the best strategy to avoid paying income taxes on the   sale after I move to another US state? Leaving the US and terminating your US residency before the sale closes. Otherwise consider checking your home country's tax treaty with the US. In any case, for proper tax planning you should employ a licensed tax adviser - an EA, CPA or an attorney licensed in your State (the one you'd be when the sale closes). No-one else is legally allowed to provide you tax advice on the matter. Because the company abroad is befriended, I have control over when   (and e.g. in how many chunks) the earnings of the sale flow into my   LLC. So I can plan where I live when that money hits my US account. I'm not familiar with the term ""befriended"" in this context, but form what I understand your description - its a shell corporation under your own control. This means that the transfer of money between the corporation and your LLC is of no consequence, you constructively received the money when the corporation got it, not the LLC. Your fundamental misunderstanding is that there's importance to when the money hits your US bank account. This is irrelevant. The US taxes your worldwide income, so it is taxed when you earn it, not when you transfer it into the country (as opposed to some other countries, for example India or the UK). As such, in your current scheme, it seems to me that you're breaking the US tax law. This is my personal impression, of course, get a professional advice from a licensed tax professional as I defined earlier." Since your YouTube income is considered self-employment income and because you probably already made more than $400 in net income (after deducting expenses from the $4000 you've received so far), you will have to pay self-employment tax and file a return.  This is according to the IRS's Publication 17 (2016), Your Federal Income Tax, so assumes the same rules for 2016 will remain in effect for 2017: You are self-employed if you: Carry on a trade or business as a sole proprietor, Are an independent contractor, Are a member of a partnership, or Are in business for yourself in any other way. Self-employment can include work in addition to your regular full-time business activities, such as certain part-time work you do at home or in addition to your regular job. You must file a return if your gross income is at least as much as the filing requirement amount for your filing status and age (shown in Table 1-1). Also, you must file Form 1040 and Schedule SE (Form 1040), Self-Employment Tax, if: Your net earnings from self-employment (excluding church employee income) were $400 or more, or You had church employee income of $108.28 or more. (See Table 1-3.) Use Schedule SE (Form 1040) to figure your self-employment tax. Self-employment tax is comparable to the social security and Medicare tax withheld from an employee's wages. For more information about this tax, see Pub. 334, Tax Guide for Small Business. I'd also note that your predicted income is getting close to the level where you would need to pay Estimated Taxes, which for self-employed people work like the withholding taxes employers remove their employees paychecks and pay to the government. If you end up owing more than $1000 when you file your return you could be assessed penalties for not paying the Estimated Taxes. There is a grace period if you had to pay no taxes in the previous year (2016 in this case), that could let you escape those penalties. Just earning the money would trigger a 1099 (assuming other requirements are met).  It doesn't matter where the money is.