Do I need to create an LLC to generate ad revenue on my website?

[baydude]

If I have a website with 50k visitors a month and id like to put ads on it, do I need to create an LLC? How much revenue a year would I need to generate in order to pay taxes for it? What's the estimated ad revenue for 50k visitors a month?

 

[IronWing]

Depends on how many of the 50k visitors are real people as opposed to webcrawlers and how many of them click on the ads. The ads on my website don't cover the cost of hosting. I also don't try very hard though with only one ad bar per page and not all pages have ads.

 

[drinkmorejava]

You don't need an llc for anything. Just pay to your personal account and you'll get a 1099-MISC every year to file with your personal income taxes

 

[clamum]

Kind of a related question... I'm going to release a paid app in the Google Play store in the near future; I'll just have to deposit any money I make (probably about $4) into my savings/checking account and report it on my taxes next year, correct? There's no legal crap I gotta worry about besides that?

 

[SearchMaster]

If I have a website with 50k visitors a month and id like to put ads on it, do I need to create an LLC? How much revenue a year would I need to generate in order to pay taxes for it? What's the estimated ad revenue for 50k visitors a month?

The only reason you'd need to set up an LLC is to limit your liability (the LL in LLC). In other words, let's say that someone gets pissed because you put some copyrighted information on your website and sues you, or claims your shiny banner ads gave him a virus. With an LLC they can't really get much out of you - they could possibly drain all the assets of the LLC/website which is likely zero. Without an LLC they would be suing you personally and could potentially take all YOUR assets. Obviously the chances of a successful lawsuit like that are going to be minimal in either case.

Kind of a related question... I'm going to release a paid app in the Google Play store in the near future; I'll just have to deposit any money I make (probably about $4) into my savings/checking account and report it on my taxes next year, correct? There's no legal crap I gotta worry about besides that?

Technically this is self-employment income and the income would be on a Schedule-C. You could offset any expenses (I know Google charges a $25 registration fee for the play store, you may have purchased a device to test on, etc.) and end up with a loss. But there's no "legal crap" really.

Disclaimer: IANAL or Acct

 

[Shlong]

No you don't need to incorporate or form an LLC. If you're using google they'll just ask you to fill out a tax form. You probably want to sign up for DMCA takedown protection. Also 50k unique visitors isn't that much, depending on where the majority of your traffic is from you might make a couple hundred a month? How many pageviews do you receive?

 

[monkeydelmagico]

The only reason you'd need to set up an LLC is to limit your liability (the LL in LLC). In other words, let's say that someone gets pissed because you put some copyrighted information on your website and sues you, or claims your shiny banner ads gave him a virus. With an LLC they can't really get much out of you - they could possibly drain all the assets of the LLC/website which is likely zero. Without an LLC they would be suing you personally and could potentially take all YOUR assets. Obviously the chances of a successful lawsuit like that are going to be minimal in either case.

LLC might shield you from that but I'm fairly certain thats not the point of one. LLC is to keep your partners from getting screwed if you mess up and vice versa.

If this is sole propitiatory business why not just set it up that way?

For OP: the short answer is NO you do not need any type of corporate structure to generate ad revenue. Unless you are going to significantly expand the business, take on partners, and start to borrow against the corporation rather than your own assets why bother?

 

[John Connor]

On my website I just have a donation link that goes to PayPal. I don't want ads of any kind.

No you don't need to incorporate or form an LLC. If you're using google they'll just ask you to fill out a tax form. You probably want to sign up for DMCA takedown protection. Also 50k unique visitors isn't that much, depending on where the majority of your traffic is from you might make a couple hundred a month? How many pageviews do you receive?

You can get take down protection? I asked some lawyers about my site regarding the domain name and they all said I shoud change the name because another company uses that name. I also asked about the images hosted on my site and so I added a content and copyright policy borrowed from Pinterest. It's the best I could do for a website I only pay $10/month for. LOL But never heard about this take down protection. What is this?

 

[Red Squirrel]

As long as you make under 30k from it you don't have to pay taxes. I think you need to start paying as soon as you hit that but I would not worry, I get about 200k page views and make about 100 bucks every few months. It's a rather neglected site though and uses Adsense which is blocked by most people. (adblock, noscript etc). You can't make a living off it but it's practically free money so always nice. I've made more money off my PayPal button on one of my smaller sites tbh so if you are offering any kind of service it does not hurt to add one.

 

[flexy]

50k uniques a month is NOT BAD, not bad at all!!

Depending on your site's niche and audience you may not only want to consider ads from Google ads (AdSense) but possibly even promoting products as an affiliate. (NOT necessarily Amazon.com)

There are many affiliate programs out there in pretty much any niche, many of them pay 50%-75% (!!), for example Clickbank, some pay idiotically high like in the financial/medical/insurance industry. It depends on your sit/audience whether revenue from clicks on ads would be better or something else.

 

[flexy]

What's the estimated ad revenue for 50k visitors a month?

This is impossible to say since it depends on your site/niche and the type of visitors, whether those are people "ready to buy" something or whether they are just browsing/reading blog entries etc.

Some niches like weight-loss are very saturated and you will have a hell of a time selling anything or getting lots of clicks, even with $50k, other, specialized niches might make you a fortune with MUCH less but more targeted visitors.

Then there are other factors such as ad-placement etc. which can make a big difference as well.

 

[turtile]

As long as you make under 30k from it you don't have to pay taxes. I think you need to start paying as soon as you hit that but I would not worry, I get about 200k page views and make about 100 bucks every few months. It's a rather neglected site though and uses Adsense which is blocked by most people. (adblock, noscript etc). You can't make a living off it but it's practically free money so always nice. I've made more money off my PayPal button on one of my smaller sites tbh so if you are offering any kind of service it does not hurt to add one.

In the US, you are supposed to report all income. Google will have to send you a 1099 if they pay out over $600 to you in a year. It gets reported to the IRS and you have to pay tax on it.

 

[PowerEngineer]

LLC might shield you from that but I'm fairly certain thats not the point of one. LLC is to keep your partners from getting screwed if you mess up and vice versa.

If this is sole propitiatory business why not just set it up that way?

For OP: the short answer is NO you do not need any type of corporate structure to generate ad revenue. Unless you are going to significantly expand the business, take on partners, and start to borrow against the corporation rather than your own assets why bother?

I'm sorry to disagree, but (as SearchMaster has already explained) the primary reason to form an LLC is to shield personal assets from possible business liabilities. Very many sole proprietor businesses are registered as single member LLCs. I created one myself in order to do some freelance consulting work.

The rules for forming LLCs vary a bit from state to state, as do the licensing and insurance requirements. My impression is that these requirements are essentially the same as those for a sole proprietor business.

Read more here:

http://guides.wsj.com/small-business/starting-a-business/how-to-start-an-llc/

http://www.nolo.com/legal-encyclopedia/limited-liability-company

 

[Imp]

As long as you make under 30k from it you don't have to pay taxes. I think you need to start paying as soon as you hit that but I would not worry, I get about 200k page views and make about 100 bucks every few months. It's a rather neglected site though and uses Adsense which is blocked by most people. (adblock, noscript etc). You can't make a living off it but it's practically free money so always nice. I've made more money off my PayPal button on one of my smaller sites tbh so if you are offering any kind of service it does not hurt to add one.

...Not a tax consultant or professional, but I think that $30k number is for a GST registration number.

You probably still have to pay tax on every dollar you make. I get less than a grand a year from my site and report all of it. I really should LLC-up but it's a hassle.

 

[John Connor]

In the US, you are supposed to report all income. Google will have to send you a 1099 if they pay out over $600 to you in a year. It gets reported to the IRS and you have to pay tax on it.

This is why I like "personal gifts." LOL

 

[Red Squirrel]

...Not a tax consultant or professional, but I think that $30k number is for a GST registration number.

You probably still have to pay tax on every dollar you make. I get less than a grand a year from my site and report all of it. I really should LLC-up but it's a hassle.

Are you sure? I asked my tax person about it and she said I don't have to worry. If I did then I'd just take the ads off as it would be more hassle than it's worth.

 

[Imp]

Are you sure? I asked my tax person about it and she said I don't have to worry. If I did then I'd just take the ads off as it would be more hassle than it's worth.

Absolutely not, I am not sure because I am not a tax professional or lawyer.

However... I remember wanting to try to become an Amazon .ca Associate and I kept seeing the 30,000 number so it looked familiar. But this is for GST and selling shit. I don't know if advertising revenue falls under that. And if it's a hobby or business, etc. Talk to a tax pro -- more than one probably.

http://www.cra-arc.gc.ca/E/pub/gm/2-2/2-2-e.html

I just report the money as income because it's essentially a hobby. What I should be doing is filing an extra form to deduct my expenses, but it's such a joke amount that I make that I don't care. If the CRA comes after me, I can say I reported it, ignored my deductions, and paid the full marginal rate. Again, not a tax pro.