SLC-S21W5: How to Handle Amazon Taxes

Hello everyone I hope you are all doing well. In today lecture we will discus essential topic for anyone earning money through the amazon Affiliate Program how to handle taxes on your income.

source

understanding tax requirement is critical to staying compliant with the law and ensuring smooth busines operation. This session will provide a detailed step by step guide on managing and paying tax relate to Amazon Affiliate earning. Additionally I will Explain how to file taxes online in my countries Pakistan through the Federal Board of Revenue (FBR) website and encourage you to research the tax filing proces for your respective countrie.

video lecture

Why Do You Need to Pay Taxes on an Amazon Affiliate Income?

Amazon Affiliate income is classified as self employment income or busines income depending on your locations.

• Self Employment Income: If you are an individual earning commission through affiliate links.
• Business Income: If you operate a registere company managing affiliate marketing.

Governments require you to report this income and pay taxe because its considered taxable earnings just like any other source of income.

---

Step-by-Step Guide to Handling Amazon Taxes

Step 1: Understand Your Local Tax Laws

1. Determine your tax residency: Identify the country where you are obligated to pay taxe (usually where you live).
2. Check income tax rates: Research how affiliate marketing income is taxed in your country.
   • Some countries have specific rates for self employment income.
   • Others may classify it regular income subject to standard rates.
3. Identify tax thresholds: Determine if you need to pay taxes based on your annual earnings. Many countris have an minimum threshold below which taxe may not apply.

Example for Pakistan:
In Pakistan online earnings are taxable if your income exceed the annual tax free threshold set by the FBR (Federal Board of Revenue).

---

Step 2: Track Your Income and Expenses

To calculate your taxable income you need to maintain proper records:

1. Income: Keep track of every payment you receive from Amazon. Download monthly and yearly reports from your Amazon Affiliate dashboard.
2. Expenses: Record business-related expenses like hosting fees Website development and advertising.
   • These expenses can often be deducted from your total earning reducing your taxable income.

Why this step is important: Accurate records make filing taxe easier and ensure compliance during audit.

---

Step 3: Submit Tax Forms to Amazon

Amazon requires affiliates to submit tax forms before issuing payments. Here how to do it:

1. Log in to your Amazon Affiliate account.
2. Go to Account Settings > Tax Information.

source

1. Fill out the form based on your residency:
   • For U.S. Residents: Fill out W-9 Forms to declaration your tax payer identifications number (TIN).
   • For Non-U.S Resident: Fill out W-8BEN Form to certify your foreign state.
2. Provide accurate information Include yours full name addres and tax identifications number.
3. Submit the form online.

source

Important Notes:

• The W-8BEN Form prevent Amazon from with holding U.S. tax on your income if your countries has an tax treaty with the U.S.
• Ensure your details match your government issued tax documents.

---

Step 4: Calculate Your Taxable Income

Once you have tracked your earnings and expenses calculate your taxable income using this formula

Taxable Income}= Total Earnings from Amazon - Deductible Expenses

Examples for Pakistan:

• Total Earning is : PKR 80 000
• Expenses is : PKR 200 000
• Taxable Income is : PKR 800000 - PKR 200000 = PKR 600000

Why these step is important: Knowing your taxable income ensures you don't Overpay tax.

---

Step 5: File Taxes Online in Pakistan (FBR Example)

In my country Pakistan taxes are filed online using the FBRs IRIS system. Here how:

1. Visit the FBR Website: Go to https://iris.fbr.gov.pk/.

source

1. Create an Account:
   • If you are filing tax for the first time register for a National Tax Number (NTN).
   • Provide your CNIC email address and phone numbers to create a account.

source

1. Log In to IRIS: Enter your credential to acces the tax filing system.

source

1. Fill Out Income Tax Return:
   • Go to the Declaration tab and select Income Tax Return.
   • Report your Amazon Affiliate income under the Income from Other Sourcess section.
   • Input your expenses in the Deductions sections.

source

1. Calculate Tax Payable: The System will automaticaly calculate the tax amount after you enter your income and deduction.
2. Pay Taxes:
   • Generate a PSID (Payment Slip ID) from the IRIS portal.
   • Pay the tax at a designated bank or via online banking apps.
3. Submit Tax Return: After payment submit your return on the portal.

Note: If you are from another country research your government tax filing platform and follow the respective procedures.

---

Step 6: Keep Tax Records

After filing taxes store all related documents including:

• Amazon Affiliate payment receipts.
• Tax forms (e.g. W-9 W-8BEN).
• Proof of tax payment (PSID receipts).

Why this step is important: Keeping records ensures you are prepared in case of tax audits or dispute.

---

Assignment Task for Week 5

1. Research and Explain

   • Find out the tax rates for self employment income in your country.
   • Discuss whether Amazon Affiliate income qualifies for any deduction.

2. Amazon Tax Form Submission

   • Describe the process of submitting a W-9 or W-8BEN form (based on your residency).
   • Provide screenshots (hide sensitive information) if possible.

3. Tax Filing Process in Your Country

   • Explain the process of filing taxes in your country using online portals if available.
   • Include steps and resources specific to your country.

4. Reflection

   • Why is it important to manage taxes properly for online earnings?
   • What did you learn from this proces?

Assignment Guidelines

• This Week 5 assignment will run from Monday November 25, 2024 to Sunday december 1, 2024.
• Ensure your post is at least 500 words. This length is necessary to provide a thorough description of your blog creation process.
• Your assignment must be free from plagiarism and AI-generated content. It should reflect your own work and understanding of the lesson.
• Use the exact title format for your post: "SLC-S21W5: How to Handle Amazon Taxes"
• You can post your assignment in any Steemit community or on your blog but must include the tag: #s21w5-afmcourse05.
• Include the #steemexclusive tag to designate your post as exclusive to Steemit.
• Add your country tag (e.g. #pakistan if you are from Pakistan) to specify your location.
• Use only your own images and screenshots throughout the post.

Following these guidelines will ensure your assignment meets the course standards.

Rewards

• Top 4 Selections: Each week we will select the 4 best asignment posts and recommend them to SC01/SC02 for additional visibility and support.
• Curator upvote: Other Steem Curators may also upvote posts base on their quality so be sure to follows the guide line and put forth your best effort

BEST OF LUCK