One of the most detrimental misconceptions concerning working in Online Marketing is that it is a tax free industry. People who go into it appear to feel that just because they are earning money and being paid through, for instance, PayPal, they don't have to pay taxes on what they make. This is not true! More importantly, failing to pay taxes on this income could possibly land you in a lot of trouble. Don't fret, though: doing your taxes as an Internet Marketer doesn't need to be hard. Here are a few ideas that will help you.
1. Set up a meeting with the local Small Business Association. Every community has some form of small business "helper" organization (often run through a community college) that's got trained professionals available to help you both getting your business starting and ensuring all of your T's are crossed and your I's are dotted. What's especially wonderful is that this resource is just about always without charge.
2. Keep track of everything. Say it again: monitor just about every last detail. This can be accomplished quickly enough using Excel. Start a spreadsheet of each penny you generate through your Online Marketing efforts and another that documents every single penny you spend on your Online Marketing efforts. You should keep receipts and invoices for all of the money you fork out.3. If you've got more than enough money, engage a professional accountant. In this way you don't have to worry about the numbers and taxes part of your small business. You tell your accountant what you've earned and paid out (make sure you can prove this with official documents) and they take care of everything else--especially during tax season.
4. Pay in toward the taxes you'll be owing at the end of the year. A fundamental rule of thumb here is to pay in 30% of every single sale. You can do this every 3 months or even every month by making Estimated Tax Payments to the IRS. The IRS is established now to receive estimated tax payments whenever you want or think you should be making them. This is going to save you from paying out a truly distressing amount of money all at once which, if you haven't been saving up for it, can be extremely stressful. What is much better is that if you have somehow overpaid through your estimated tax payments, you're going to get a refund just like you would if you were working for a traditional employer. It's important to speak with someone at the IRS so that you can get this set up properly.
5. Learn which tax deductions you're permitted to take. When you run your own business lots of things including your utility payments, etc are tax deductible (as is any money you spend on business equipment or supplies). Your accountant or someone from the IRS can help you figure out what all you can deduct once it's time for you to pay taxes.Becoming intimidated by the tax process when you are an online marketer is quite common. Luckily, there are all sorts of resources available to help you stick to the law and still keep yourself from losing your shirt to the IRS!
1. Set up a meeting with the local Small Business Association. Every community has some form of small business "helper" organization (often run through a community college) that's got trained professionals available to help you both getting your business starting and ensuring all of your T's are crossed and your I's are dotted. What's especially wonderful is that this resource is just about always without charge.
2. Keep track of everything. Say it again: monitor just about every last detail. This can be accomplished quickly enough using Excel. Start a spreadsheet of each penny you generate through your Online Marketing efforts and another that documents every single penny you spend on your Online Marketing efforts. You should keep receipts and invoices for all of the money you fork out.3. If you've got more than enough money, engage a professional accountant. In this way you don't have to worry about the numbers and taxes part of your small business. You tell your accountant what you've earned and paid out (make sure you can prove this with official documents) and they take care of everything else--especially during tax season.
4. Pay in toward the taxes you'll be owing at the end of the year. A fundamental rule of thumb here is to pay in 30% of every single sale. You can do this every 3 months or even every month by making Estimated Tax Payments to the IRS. The IRS is established now to receive estimated tax payments whenever you want or think you should be making them. This is going to save you from paying out a truly distressing amount of money all at once which, if you haven't been saving up for it, can be extremely stressful. What is much better is that if you have somehow overpaid through your estimated tax payments, you're going to get a refund just like you would if you were working for a traditional employer. It's important to speak with someone at the IRS so that you can get this set up properly.
5. Learn which tax deductions you're permitted to take. When you run your own business lots of things including your utility payments, etc are tax deductible (as is any money you spend on business equipment or supplies). Your accountant or someone from the IRS can help you figure out what all you can deduct once it's time for you to pay taxes.Becoming intimidated by the tax process when you are an online marketer is quite common. Luckily, there are all sorts of resources available to help you stick to the law and still keep yourself from losing your shirt to the IRS!
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For more information on internet marketing and taxes check out my http://www.streetsmartsprofits.com/category/street-smart-profits/ blog.
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