Tax Helpers for Internet Marketers
Any dollars made as a result of your Internet Marketing work counts as income. That income has to be reported to the INTERNAL REVENUE SERVICE and you also need to pay taxes on it. Sadly, making income on the web is not tax-free. Don’t trust any person who claims otherwise. After all, you don’t wish to find yourself in trouble with the IRS do you? There are not a lot of things that are worse than getting audited! Obviously, if you haven’t ever had to take care of your own taxes previously, mastering how to account for your income and expenses and the amount of money that you owe can be really baffling. Here are some hints to help you out.
The most important factor that you should do is keep income records. These records must be incredibly detailed. Every individual payment you receive, who pays it and what it is for has to be written down and recorded. The day must be included for each payment as well. You are able to use a system like QuickBooks to keep track of these details for you or you can set up a system of your own. Some folks find a simple Excel spreadsheet works best for them. Do not eliminate these kinds of records after you file your tax return. It is very important that you keep them on hand for at least three or four years just in case an IRS agent wants to see them. Some have stated that if you haven’t been audited for any tax year within the three consecutive years following it you will be fine, but double check your state rules to make sure.
Keep all your invoices as well as receipts for every penny you spend. In IM lots of items can be deducted for small business purposes. Website running costs, to apply one example, can generally be claimed on your taxes. The dollars you pay for office products is usually also deductible. Do you go to conferences? Ask if you’re able to deduct your travel costs and the cost of the conference. You may also deduct a lot of the money that you pay out each month for your internet connection. Be sure to hold all your receipts as well as copies of your paid bills so that you will have a record proving what you spent.
Pay taxes throughout the year. Internet Marketing is formally viewed as freelance work and freelancers often pay their taxes quarterly so that, when the end of the year comes, they do not owe as much. A fine guideline is 30% of your earnings for that quarter. The IRS has a program in position now that will even let you make payments each month. Keep track of just how much you pay. When it comes time to file your annual tax return, if you’ve unintentionally sent in too much money, you’ll be offered a refund in the amount that you have overpaid.
There are a large amount of approaches to help to make tax time a lot easier when you work in the IM market. The IRS website is filled with useful tips that you can use to make your book keeping and tax preparation tasks easier. If you are making enough money to do so, you could potentially even hire an accountant to take care of every thing for you.
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