Taxes Made Simple

A reader asks: I started a blog in 2008 and earned a few hundred dollars using Google Adsense. Do I just include this with my regular income when I file my tax return?

My answer: Not exactly. In short, Adsense income counts as business income. Assuming that you didn't set up any official business entity (such as a corporation), your business will be taxed as a sole proprietorship. That is, you will report your income (and business-related expenses) on Schedule C, which is essentially just an attachment to your 1040.

Also, if your business income was greater than $400, it will be subject to Self-Employment Tax in addition to regular income tax.

About the Author: Mike Piper is the author of Surprisingly Simple: Independent Contractor, Sole Proprietor, and LLC Taxes Explained in 100 Pages or Less.