If you are a neophyte in realm of online business, then perhaps you have a lot of questions that are plaguing your mind and one of them may be all about whether you are obliged to pay taxes for your online business or not.
If you are one of the many people who is interested in starting your own online business or if you already have an online business of your own, then for sure you have heard about the controversies about online businesses and taxes.
Most people who don't really have a stable background about online businesses and taxes would most probably guess that owners of online businesses are able to be exempted from paying taxes.
Majority of the people who are involved with E-bay buying and selling would try to say that they don't really have to pay tax from what they earn through the Internet because they are only treating it as a hobby.
Well, first of all, it is very hassle-free compared to having a business in the non-virtual world. You see, in online business, you only have to type and click for your business to boom.
Very minimal manual labor is needed in an online business and one can even get to work at home in their pajamas while managing their online business.
You need to consult with the IRS people first before you can truly say that you are exempted from paying taxes while you are participating in your online business.
Sure, the government can't possibly keep track of how much money each person generates online but then again, it's one of the citizens' responsibilities to go ahead and be responsible enough to pay for their taxes.The truth is, not everybody who does business online is honestly paying their due taxes. Most online businesses include shopping and it's a known fact that most if not all shoppers despise paying sales tax and adore a bargain that is luxuriously tax-free.
If you are a sole proprietor of an online business, any income you earn through your online business will be taxed as income on your PTR or personal tax return.
For example, you bought an exquisite looking flower vase at a flea market for $5 and then you decide to sell it an eBay for $20. You manage to sell it for $20 so that means you had a $15 profit which would then entail you to report it as income and pay your taxes as fair share.
However, if you have incorporated your business, the way of paying taxes will become slightly different compared to when you are the sole proprietor of your online business.
Sometimes, the tax you pay as an incorporated online business will also depend on the kind of organization. It's either you will pay tax at a corporate level or it will be passed down to you as an income.
Dealing with an taxes and your online business can be quite an ordeal if done alone so it would be much better if you'd contact experts regarding this matter such as a lawyer or a certified public accountant.
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Thank you for reading my article on Taxes for your online business, please take the time to read my articles on lender loans and mutual mortgage as well!
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