Today I want to tell you a little story about how to NOT handle your tax stuff.
Often you can read online that you shall treat your affiliate marketing like a real business.
Probably they mean that you should be serious about it.
That you shouldn´t think just because you can work on it from home it´s a hobby that makes money.
No, when you really want to do it longterm and successful you need to treat it like a business.
Because it is your business.
Anyway, now let´s come to my own story and how I learned it the hard way.
With my example I want to show you why in some situations it´s even absolutely mandatory to treat your affiliate marketing as a business.
When you don´t do it you can get into really bad trouble, I know what I am talking about.
One of these situations is something we all hate – Taxes.
I am a rather relaxed and sloppy guy.
Also I am not the most organized guy on earth.
In normal situations such behaviour is annoying at the most.
But for business it can fuck up your life pretty hard.
I know how I am so of course I don´t do my taxes myself.
I just give all my documents to my tax adviser and she takes care about it and sends it to the tax office.
Unluckily even there I am sloppy and didn´t care of it as much as I should do.
I extra have two separate bank accounts, a private one and one for business.
That should help me to get my stuff a little bit better organized.
But for several years I just got some of my affiliate earnings paid to my private bank account.
And with some I mean not too less.
I only wanted to save me the few minutes work sending the money from my business bank account to my private one.
I didn´t even think about it, I just did it.
Of course this already was stupid enough.
Even more stupid was that I then didn´t give these earnings to my tax adviers.
When I did my taxes I only checked my business bank account and totally forgot to consider the earnings from my private account as well.
A good mixture of carelessness and distraction made such behaviour possible.
In all the years I never thought about it until the big day in September 2015.
Early in the morning my doorbell rang.
I was just about to leave the house to drive to my office so I opened the door.
A bunch of unfriendly looking people stood in front of my door and showed me their badges.
This is how I made contact with the tax investigation.
Before I knew what´s going on I had the house full of people and the house search started.
There were 6 or 7 people in my house, some asked questions all the time and I just told them that I have no idea what they want from me.
Then I had to call my wife that she comes home because I had to go to my office where another group from the tax investigation was waiting already to search my office as well.
They took whole backups of my both computers and took all documents with them.
Same at home, they took all computer devices and documents that only slightly looked work related with them.
In the meantime they also visited my tax adviser to get all of my documents from there as well.
About 2-3 hours later the whole shit was finished.
At the end I had to go to my bank with them and give them €5k in cash so that they don´t seize my property or car.
Then the real fun started, first thing I did in the afternoon was to get a lawyer.
Few days later I had an appointment and told him what happened.
We agreed that he takes care of it.
It then took some time until he couldm inspect the files to see what exactly I was accused of.
Before I didn´t even know if it´s about €1k or €100k so you can imagine that the uncertainty in these few weeks was really grueling.
I think it was end of the year when I finally knew what all the trouble was about.
My lawyer recommended me to work together with the tax investigation to don´t make it worse so I did.
I mean, in the end I didn´t have a choice anyway because they had all my shit and could access all my bank information.
Beginning of 2016 then I had an appointment with my lawyer together with the guy from the tax investigation who controlle the operation.
The guy suddenly came up with new numbers and I was really shocked.
From what he showed me I had to pay around €30k more than I thought it will be.
Luckily enough I am pretty good with numbers and could show him that his calculation was wrong and that I was right.
After that appointment we then agreed to what I had to pay and I just had to wait for the final numbers.
Long story short, eventually I had to pay almost €25k to the tax investigation (taxes plus fine).
So you can see, I didn´t treat my business as a business there and just ran it too slopy.
Just because I wanted to save few minutes each month and forgot about it I had lots of trouble and many grey hair on my head.
And the moral of the story, don´t be that fucking stupid guy.
When you start making money get serious about it.
Running on scale is no game and the tax investigation is no one you want to mess with.
The post was first published on Zorbas Media