If you’re reading this post, hopefully, you’re well on your way to and current earning a decent amount of extra income from your online endeavors. There is one tip to particularly discuss that many “e-comers” would like to make known: online income vs. personal income. What’s the different and should they be separate? Let’s start with the first question.

What is the difference between Online Income and Personal Income?
Online Income should be considered more like income you would receive from a job. It pays you, yes, but you should approach this income in the same way a freelancer would. If you have qusetions on taxes and whatnot, you should contact a CPA and find out the laws in your state and county regarding income received from your online ventures.

Personal Income would be money a friend owes you. This isn’t necessarily something that applies to your ventures, but should still be considered as income you live on. Just as with Online Income, you should contact a CPA and find out the laws in your state and county regarding personal income.

Should they be separate?
The answer is a resounding yes! There are two good reasons for this. For one, essentially, your online income is your job. You pay yourself from that and other monies for advertising, websites or domain hosting, affiliate programs or other business generating purchases come out of online income. Keeping it separate can help you later during tax time. Secondly, it helps you realize how much you are actually making from your online ventures. You get to see the results of your work and see your success! Plus, if something needs to be tweaked or changed, you can see exactly how and where and put your finances from your Online Income to better use.

- MoneyBlogOnline.com

*Note: MoneyBlogOnline.com is not in anyway offering accounting, CPA, or tax advise with this article.