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2023-08-07T21:35:30-07:00

We provide CPA services for affiliate marketers. Affiliate marketing, a performance-based marketing strategy that has grown in leaps and bounds over the past several years, offers rewards to affiliates who promote other business’s products and services and they are paid a percentage of the sale. This often creates a residual income for them as well. This means that if a subscription or a monthly membership is involved, the affiliate marketer could San Diego CPA receive a substantial amount of revenue on an ongoing, monthly basis; or for as long as there is an active subscription for the membership that is being paid.

Although this is only a referral fee for the company that pays the affiliate marketer, it is a taxable revenue item for the person receiving the referral fee –the entrepreneur and affiliate marketer.

Regardless of whether income from performing affiliate marketing services is your core primary source of revenue or ancillary revenue, it is still earned taxable income that must be reported on your tax returns.

It’s also important is for those who perform affiliate marketing services to determine when the revenue is recognized so that it can be recorded in the proper income period. This allows us as an accountant and tax preparers to better determine when the revenue is recognized. However, there are other accounting and tax issues that the affiliate marketer needs to be concerned with as well. Seeking the assistance and guidance from a qualified CPA can provide you with the information you need to best determine which accounting period your revenue is recognized in.

As a CPA for affiliate marketers and as an accountant, we will also be able to explain the accrual versus the cash basis of accounting. Even if you are located in the San Diego area and generate an income from other parts of the country, as a San Diego Accountant and CPA for affiliate marketers, we can help you identify the tax responsibilities on a state by state basis as applicable by law – regardless of what which method of accounting, you use. Our tax preparation services have afforded us the ability to specialize in analyzing revenue earned in both the local San Diego area and abroad.

Cash versus the Accrual Basis of Accounting

Businesses that operate in the United States must use an accounting method as outlined in the IRS Publication 538, whereby you must determine when and how long you will report your income and expenses on your tax return. As tax preparers and accountants, we can help you understand the difference between each of the methods so that you can make an informed decision about which is best for your company. Two of the most common methods used include the accrual and the cash method as described in more detail below.

The Accrual Method of Accounting

The IRS states that under the accrual method of accounting, business owners must generally report both income and expenses in the year in which it occurred. So basically, the accrual accounting method would allow business owners to match their income and expenses in the proper tax year.

The Cash Method of Accounting

According to the IRS, when using the cash method of accounting, business owners (to include affiliate marketers) typically record their gross income at the time the cash is received – within the same tax year. Under the cash method, expenses are also recorded and deducted during the tax year in which they are actually paid. The cash method of accounting also has other limitations and requirements as set forth by IRS that members of our accounting and tax team can address as well.