Domaining and Taxes

It’s a new year and many people are getting started on their taxes. If you are new to the Domaining world taxes can be a very confusing subject…actually let’s be honest, taxes are really confusing when it comes to Domaining businesses period. I recently received an email from one of my readers asking me to do a post about Domaining and Taxes so I’d like to give a special thanks to Alex for inspiring this post πŸ™‚

When I first started my business I did my taxes myself…however I can clearly say that this was a mistake and you should really leave this to the professionals. The problem that you’ll oftentimes encounter is that your average accountant knows absolutely nothing about Domain Names and the tax laws regarding Domaining businesses. As a Domainer it is really up to you to educate your accountant – however most of us don’t know the first thing about domains and taxes…luckily there is a book that can help!

I purchase the Domain Tax Guide – available from http://www.domaintaxguide.com/ and gave this to my accountant. This guide clearly explains how to do your taxes if you run a Domaining business or make an income with Domain names. If you are bold enough to take-on the challenge you can use this book as your guide but I would highly recommend that you just pass this guide onto your accountant and let them take care of the details.

I don’t make a dime if you buy this book so please don’t mistake this for a sponsored post – I actually used this book for my taxes last year and my accountant was very happy..although he still said it was a lot of work! If you have any tax questions feel free to comment on this post – I’m sure there are other readers who can assist if I can’t!

{ 7 comments… add one }

  • Acro January 16, 2010, 5:48 pm

    First step to domaining: incorporate. Second: use a CPA. Third rule: flip domains (hold them for less than a year) and the revenue (sales price minus acquisition cost) will be taxed as regular income, at about the 30% rate (or whatever). Sell domains after you held them for a year and your revenue is taxed as capital gains at 15%. Always consult a CPA or tax professional before making any large acquisitions.

    Reply
    • Morgan January 17, 2010, 1:40 pm

      Thanks @Acros – great advice!

      Reply
  • Tim Davids January 16, 2010, 8:22 pm

    Yowza…$80 for an ebook.

    that should include a copy of H&R block tax cut πŸ™‚

    Reply
  • Alex January 16, 2010, 10:11 pm

    Thanks Morgan! Good post!

    Reply
    • Morgan January 17, 2010, 1:40 pm

      Thanks @Alex!

      Reply
  • PPC Ian January 18, 2010, 9:28 pm

    Thanks Morgan and Acro,
    This is very helpful information.
    All the best,
    Ian

    Reply
  • Charlotte April 7, 2011, 10:15 pm

    Hey Morgan…. Bought the book and now my CPA and I are gonna go through it as soon as it gets delivered. I m hoping it will keep me from going to debtors prison.. Horizontal stripes dont look good on my frame…

    Reply

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