Doing business online is starting to be a much preferred way of transacting business both by the sellers and the buyers not only because it is way more hassle-free than real shopping but also because it provides a chance for a tax-free business transaction to transpire.
Most people think that the Internet is really a great venue for earning extra income or for generating extra money through sidelines such as buying and selling, auctioning, etc.
Trying to start an online business is pretty much the same as starting any business in the world. Some people who are involved with online businesses usually use their ignorance as an excuse not to pay taxes.
The changes to be implemented on July 1 are the result of a state law passed in 2007. The certain state law changes the way the taxes are calculated - a major alteration that spurs some headaches and confusion among all online retailers.
Any business, whether online or not, really has to pay its due taxes. Some people would resort to starting an online business thinking that they can evade tax payments if they do so but the truth is, the tax dues will surely catch up with them one way or another.
In technical terms, the tax system will be changed from origin-based to destination-based. Yes, you read that right - the tax is not levied on the business, instead, it is levied on the part of the consumer. It is the obligation of online businesses to collect tax from its consumers and remit it to the state.
Your online business will more or less fall under the category of a mail order business (that is if you are planning to sell stuffs online). You will need to learn about the sales tax requirements that come along with your online business so that you will not encounter any problems in the future.
If you have your so-called online business, you should be aware of the rules of the IRS: one is required to pay taxes on all business and personal income and that includes the dough you make selling stuffs on the Internet.As heartbreaking as this may sound, even the simplest business transaction made through the Internet needs to be reported as "income".
If you want to have a successful online business, you should try to keep it as clean and honest as possible. Don?t even try to pull off any illegal or mischievous tricks in your business or it may jeopardize your success.
Realistically speaking, if you don?t treat eBay as a serious and constant venue for your online business, then perhaps you can get away with selling a few items every now and then without having to worry about the IRS tracking you down with their questions about tax dues and other stuffs.
However, if you are a consistent chap at eBay, then the IRS people might categorize your eBay participation as something that is business oriented and you may end up being required to file a Schedule C form and claim the income that you have spurred.
However, it does not mean that it should be a trend that should be followed. It is greatly possible to have an online business that is clean, honest and legal. If you really want to pursue your online business, the tips mentioned here will be truly of help to you and if you still need more help and assistance, a visit to a lawyer will surely be of greater help.
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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 loans rates and mortgages loans as well!
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