One of the most detrimental myths about working in Online Marketing is that it is a tax free industry. Individuals go into IM convinced that because they are generating an income online and being paid through, mostly, PayPal--they don't have to pay taxes on that money. This is not true! What's more important is that if you fail to pay taxes on this money, you can actually wind up in all kinds of trouble! Don't fret, however: doing your taxes as an Internet Marketer doesn't need to be difficult. Here are some ideas to aid 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. Monitor every single thing. Let me repeat that because it is important: keep track of each detail. This is certainly simple to do through Excel. Set up a spreadsheet and record every last cent you earn with your Internet Marketing business and also one that tracks each and every cent you spend on your IM efforts. Be sure to keep each and every receipt and invoice for the money you shell out.3. If you have the money to do so, work with an accountant. In this way you do not have to worry about the numbers and taxes part of your online business. 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 season.
4. Pay in toward the taxes you will be owing at the end of the year. A good rule is to pay 30% of each sale. This can be done every 3 months through Estimated Tax Payments with the IRS or you could even do this monthly. The IRS is now set up well enough that they can receive estimated tax payments from you whenever you feel like making them. This is going to save you from paying out a really distressing amount of money all at once which, if you haven't been saving up for it, can be incredibly stressful. What's great is that if you overpay through your estimated tax payments, you'll get a refund like you would by paying taxes with a regular job. Be sure to consult with someone at the IRS to make sure you get set up correctly.
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. Monitor every single thing. Let me repeat that because it is important: keep track of each detail. This is certainly simple to do through Excel. Set up a spreadsheet and record every last cent you earn with your Internet Marketing business and also one that tracks each and every cent you spend on your IM efforts. Be sure to keep each and every receipt and invoice for the money you shell out.3. If you have the money to do so, work with an accountant. In this way you do not have to worry about the numbers and taxes part of your online business. 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 season.
4. Pay in toward the taxes you will be owing at the end of the year. A good rule is to pay 30% of each sale. This can be done every 3 months through Estimated Tax Payments with the IRS or you could even do this monthly. The IRS is now set up well enough that they can receive estimated tax payments from you whenever you feel like making them. This is going to save you from paying out a really distressing amount of money all at once which, if you haven't been saving up for it, can be incredibly stressful. What's great is that if you overpay through your estimated tax payments, you'll get a refund like you would by paying taxes with a regular job. Be sure to consult with someone at the IRS to make sure you get set up correctly.
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.
