Internet Marketing Tax Tips and Tricks

March 19, 2012 | Author: | Posted in Article Marketing

One of the biggest and most potentially risky myths about Internet Marketing is that it is a tax free marketplace. Men and women get into it convinced that because the money they earn comes to them mainly through online sources like PayPal that they don’t have to pay taxes on the things that they’ve earned. This is simply not true! Most importantly, failing to pay taxes on this income could get you into all sorts of trouble! Fear not, though: doing your taxes as an online marketer doesn’t have to be tough. Here are some things which will help you.

1. Make an appointment with the local Small Business organization. Each community has a Small Business Association (typically working through a community college) that has specialists on both starting your business and making sure that all of the details (like taxes) are handled. Best of all, this resource is almost always free of charge!

2. Monitor every single thing. Say it again: keep an eye on each and every last detail. This is simple to do with Excel. All you need is one spreadsheet that will keep track of all of the money you earn (down to the penny) and another that will keep track of all of the money you spend (again, down to the penny). Be sure to keep receipts and invoices for all of the money that you fork out.

3. If you can afford it, work with an accountant. This would prevent you from having to worry about the numbers and the taxes for your small business. You tell your accountant what you’ve generated and put in (be sure to have documentation for proof) and they take it from there.

4. Pay in toward the taxes you will be owing at the end of the year. A good guideline is to pay 30% of every sale. You can do this every quarter through Estimated Tax Payments with the IRS or you could even do this monthly. The IRS today has the ability to receive estimated tax payments any time you think or want to make them. This would keep you from paying out a gut wrenching amount at the end of the year (which, if you haven’t saved up for it, is going to be particularly stressful). Better yet: if you have overpaid in your estimated tax payments, you will get a refund — just like you would if you were working for an employer! Be sure you consult with a person at the IRS to get this set up the right way.

5. Learn which tax deductions you are allowed to take. When you run your own business at home, there are a lot of things, like the money you pay in for utility payments, that become tax deductible–just like paying for other business related supplies. Your accountant or someone from the IRS can help you figure out what all you can deduct when it’s time for you to pay taxes.

It is not all that difficult to become intimidated by the idea of paying taxes when you are a web marketer. The good thing is that there are plenty of resources to help you make sure you stick to the law and keep a healthy share of the profit you make!

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