Any dollars made as a result of your Internet Marketing work counts as income. The IRS has to be informed on that income and it is something on which you should pay taxes. Unfortunately, money attained online isn't tax free. Don't trust any person who makes an attempt to express to you anything that is different. After all, you don't want to wind up in trouble with the INTERNAL REVENUE SERVICE do you? There are certainly not a lot of things which are worse than getting audited! If you have not ever had to take care of your individual taxes before, it can be really difficult to have to deal with your own income, expenditures and what you owe. Here are some items which will help you.
You must ensure that you keep very careful files of the amount of money you make. These files have to be extremely detailed. Write down every single payment you obtain, who paid it to you and what the payment is for. The day of the payment should be documented too. You may use a method like QuickBooks to keep track of these data for you or you can set up a system of your own. For some people, a simple Excel spreadsheet performs the best. Do not do away with these records after you file your tax return. It is very important that you keep them around for a minimum of three or four years just in case an IRS agent wants to see them. Some claim that, after 36 months, if you haven't yet been audited you will be okay, but check with the local tax rules of your state.
Save each of the receipts and invoices for any capital you pay out. In Online marketing, a lot of things can be business related deductions. The price of operating your site, for example is usually tax deductible. The money you pay for office products is normally also deductible. Do you go to conferences? You could be able to deduct some of your travel costs as well as the cost of the conference itself. Sometimes even most of the money you set toward your internet bill might be deducted as well. Make certain you keep all of your receipts and copies of paid bills so that you'll have a document proving what you spent.
Pay on taxes over the course of the year. What you do is technically called freelancing and most freelancers will submit quarterly tax payments so that, when the end of the year comes they will not owe as much. A good rule of thumb is 30% of your earnings for that quarter. The IRS at this point has a program which will let you make payments as often as every month. Keep files of what amount you pay in. When it comes time to file your annual tax return, if you've inadvertently sent in too much money, you'll be granted a refund in the amount that you have overpaid.
There are a lot of ways to help to make tax time easier when you work in the IM market. You will get lots of great tips on the IRS website that are made to make it easier to streamline the whole process from book keeping to tax prep. If you will have the cash you might think about using the services of an accountant to take care of everything for you.
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