Any dollars made through your Internet Marketing work counts as income. The IRS needs to know about that income and it is something on which you need to pay taxes. Sadly, the bucks you make on the web is not exempt from taxes. Don’t believe any person who tries to tell you anything that is different. After all, you do not really want to get into trouble with the IRS do you? There aren’t many things that happen to be worse than getting audited! Obviously, if you haven’t ever had to take care of your own taxes before now, learning how to record your income and expenses and the sum that you owe can be really confusing. Use the following advice to help you.
The most significant issue you must do is keep income records. The records must have a lot of details in them. Record every single payment that you get, who paid it to you and exactly what the payment is for. The date of the payment needs to be recorded too. You are able to use a system like QuickBooks to keep track of these data for you or you can set up a system of your own. Some people do just fine with a simple Excel spreadsheet. Don’t simply toss out these records right after your taxes have been sent in. You will want to keep them accessible for no less than a few years just in case someone from the IRS wants to see them. Some have claimed that if you haven’t been audited for a tax year within the three consecutive years following it you should be fine, but double check your state rules to make sure.
Keep all of your bills and invoices for your costs. In IM a lot of items can be deducted for business purposes. Website running expenses, to work with one example, can typically be claimed on your taxes. The dollars you pay for office items is usually also deductible. Do you journey to seminars? You may be able to deduct some of your travel expenses as well as the cost of the conference itself. Once in a while even a lot of the money you spend on your internet connection might be deducted too. It is essential to hold records and duplicates of all of your receipts and payments so that you can prove what you have spent.
Pay taxes over the course of the entire year. Internet Marketing is formally a sort of freelance work and most freelancers pay toward their taxes on at least a quarterly basis so that, when the end of the year rolls around, they won’t have to pay as much. A safe sum to follow is 30% of what you have earned in that quarter. The IRS has a system in place now that will let you make payments each month. Keep records of how much you pay in. When you file your yearly tax forms, in case you have unintentionally paid too much into the system, you will be given a refund for what you have overpaid!
There are plenty of ways to make your taxes simpler to handle when you work in Internet Marketing. You will find lots of great tips on the IRS website that are designed to allow you to streamline the whole process from book keeping to tax prep. If you’ve got the money you might look at hiring an accountant to take care of everything for you.
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