Tax Advice for Web Marketers

One of the most detrimental myths concerning working in Web Marketing is that it is a tax free industry. Men and women go into it thinking that since the money they earn comes to them mainly through online sources like PayPal that they don’t need to pay taxes on the things that they’ve generated. This is absolutely bogus! What’s more important is that if you don’t pay taxes on this money, you could wind up in all kinds of trouble! There’s no need to worry, though: Internet Marketing taxes don’t have to be stressful. Here are a few ideas that will help you.

1. Set up an appointment with the local Small Business Association. Each community has a Small Business Association (typically working through a community college) that has specialists on both starting your business and making sure that all of the details (like taxes) are handled. What’s notably great is that this source of information is just about always cost free.

2. Record each and every little thing. Let’s say it once more: monitor each and every last detail. You can do this easily enough with Excel. Create a spreadsheet and record every last cent you earn with your Internet Marketing business as well as one that tracks every single cent you spend on your IM efforts. You should keep receipts and invoices for all of the money you spend.

3. If you have the money to afford it, hire an accountant. This will prevent you from having to worry about the numbers and the taxes for your business. You tell your accountant what you’ve earned and paid out (you should can prove this with official documentation) and they take care of everything else–especially during tax season.

4. Pay towards the taxes you will owe throughout the year. 30% of each sale is the basic rule of thumb you need to follow. You can do this through quarterly Estimated Tax Payments or even monthly with the IRS. The IRS is currently set up well enough that they can receive estimated tax payments from you whenever you feel like making them. This would keep you from paying out a gut wrenching amount at the end of the year (which, if you haven’t saved up for it, can be particularly stressful). Better still: if you have overpaid in your estimated tax payments, you’ll get a refund — just like you would if you were working for a business! It’s important to consult with someone at the IRS so that you can get this set up the right way.

5. Find out which deductions you are allowed to take. When you operate your own business a lot of things like your utility payments, etc are tax deductible (as is any money you spend on business equipment or supplies). An accountant or an IRS rep will be able to help you figure out what all you can deduct come tax time.

It is not all that hard to become intimidated by the idea of paying out taxes when you are an online marketer. Fortunately, there are all sorts of resources available to help you follow the law and still keep yourself from losing your shirt to the IRS!

Article source: http://newdatabackup.com/internet-marketing/tax-advice-for-web-marketers/