What happens if you earn money in US Dollars from your website? What do we need to know about tax? Online Entrepreneurs Matt and Liz Raad answers these questions in this video.
Liz: Hi! It’s Liz and Matt here with you and today we want to answer a really common question that we get all the time which is, what happens when I earn money in US dollars from my websites? So, most of our websites are based overseas, most of them are in the US so a lot of our income is from US dollars. So, what happens? How do you do that?
Matt: It’s a really good question and the good news is, you don’t need to have US bank account or US companies or anything. It’s a really simple matter of if you’re an affiliate, a lot of our websites own an affiliate income or advertising revenues and basically, we just have an affiliate account with the companies that pays affiliate commissions and literally, they just transfer the money straight into our Australian bank accounts whether that’s a business account or it can be a personal account, it’s very straightforward.
Liz: Of one or two that don’t do that, Paypal.
Liz: It’s very simple.
Matt: And believe it or not at this day and age, there are still American companies that will send you physical cheques so occasionally we get physical cheques and you just go and get it to your bank account and cash it.
Liz: So, I guess the other question that we often get is, what about the tax? You know, I’m earning money from America, from American companies, how do I pay it? What happens to the tax on that?
Matt: Well, basically it’s –
Liz: And again, we’re not financial advisers.
Matt: Yes. We’re not going to let give you financial advice or tax advice but again, it’s really simple because the money is literally transferred over here to Australia, to our Australian bank accounts and again, Liz and I, we don’t have American bank accounts from American companies so the money is just transferred straight into our bank accounts here and we pay tax here in Australia.
Matt: And we signed to do that. Australia has a tax treaty with America and you just sign a form, it’s called W8 form and again, your affiliate program should send you that form and you just sign that off to sale. Even in Australia, we’ll pay the tax here.
Liz: We’ll pay the tax here.
Matt: That’s all really straightforward. That just get added to your income and that can be – you might – when you’re starting out small, not that we’re giving tax advices, but when you’re starting out small and you’re learning on those small sites that we strongly recommend you to do learn on, obviously, the dollar amounts are quite small.
So, you might just add that to your personal income.
Matt: And then as you get bigger and you step it up, you might want to talk to your account and maybe want to use different strategies there. But again, it’s all just based here in Australia, it just shows up as an income here in Australia.
Liz: Yes. That’s the cool thing. You can earn income from all over the world and luckily in this day and age, it is really simple and easy to do that. So, that’s a great thing about owning a portfolio of websites that you can earn money from all these different countries and it’s quite simple and easy these days.