web marketing tax is one of those things where the total influence it has primarily rests on other considerations.
The misconception that Online Marketing is a tax free industry is pretty much the worst and most dangerous misconception in the market. People who get into it usually think that just because they are making money and being paid through, for instance, PayPal, they don’t have to pay taxes on what they generate. It is untrue! More importantly, failing to pay taxes on this income can get you into all kinds of trouble! Don’t worry, though: doing your taxes as an online marketer doesn’t have to be difficult. Here are some tips to assist you.
1. Obtain an appointment at your local Small Business Association. All communities have some kind of small business helping association or organization (generally run via a local community or city college) that has many trained experts on hand to help you both set up your business and ensure that all of your tax issues are carefully and correctly taken care of. The wonderful thing is that this useful resource is almost always cost free.
2. Document each and every little thing. Let’s say it once again: keep an eye on every single last detail. This can be done quickly enough with the help of Excel. Create a spreadsheet and report every last cent you make with your Internet Marketing business in addition to one that tracks every single cent you spend on your IM efforts. Make sure you keep receipts and invoices for all of the money you pay out.
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3. If you’ve got sufficient funds, engage a professional accountant. This would allow you a little freedom in the tracking of all of your taxes and small business numbers. You tell them how much money you’ve earned, show them how much you’ve invested (you’ll need proof of these things) and they take care of the rest, particularly at tax time.
4. Put money towards the taxes that you could owe at the end of the year. 30% of each sale is the fundamental rule of thumb you need to follow. This can be done through quarterly Estimated Tax Payments or even every month with the IRS. The IRS is set up now to get estimated tax payments whenever you want or think you should be making them. This will save you from coughing up a really distressing amount of money all at once which, if you haven’t been saving up for it, can be very stressful. What is better is that if you have somehow overpaid through your estimated tax payments, you’ll receive a refund just like you would if you were working for a traditional employer. Be sure to speak with someone at the IRS to make sure you get set up properly.
5. Learn about your allowed tax deductions. When you operate your own business quite a lot of things such as your utility payments, etc are tax deductible (as is any money you spend on business equipment or supplies). Your accountant or a representative from the IRS should be able to help you figure out which deductions you can claim at tax time.
It is easy to get intimidated by the idea of paying taxes as an Internet Marketer. The good thing is that there are a lot of resources to help you make sure you observe the law and keep a healthy share of the profit you make!