When you earn money via your Internet Marketing endeavours that money counts as income. That income must be informed to the Internal Revenue Service and you need to make sure you pay taxes on it. Sadly, making money on the net is not tax-free. Don't trust any person who tries to express to you anything that is different. You don't want to wind up in difficulties with the Internal Revenue Service do you? There aren't that many things that happen to be more irritating or stressful than getting audited. Obviously, if you haven't ever had to take care of your own taxes previously, finding out how to keep track of your income and expenses and the amount of money that you owe can be really baffling. Here are a few hints to assist you.
You have to be sure that you hold very careful files of the amount of money you make. The documents have to have lots of details in them. Write down each transaction you receive, who paid it to you and what the payment is for. The date has to be included for each payment as well. These records can be saved in a home accounting program like QuickBooks or you should use a technique that you set up yourself. For many people, a simple Excel spreadsheet performs the best. Don't merely toss out these records once your taxes have been submitted. You must keep them available for, at a minimum, a few years just in case someone from the IRS asks to see them. Some have said that if you haven't been audited for any tax year within the three consecutive years following it you ought to 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 internet business purposes. Website managing expenses, to use one example, can typically be claimed on your taxes. Money you spend on business supplies could also generally be deducted. Do you go to conferences? Check to determine in case your travel expenses and the cost of the conference can be deducted. Once in a while even some of the dollars you spend on your internet connection might be deducted too. It is essential to hold records and duplicates of all of your receipts and charges so that you can prove what you have spent.
Pay taxes throughout the entire year. What you are doing is technically called freelancing and most freelancers will submit quarterly tax payments so that, when the end of the year shows up they will not owe as much. A great guideline is 30% of your revenue for that quarter. The IRS currently has a procedure which will let you make payments as often as every month. Keep track of just how much you pay. When you send your taxes in for the year, if you have overpaid, you'll be given a refund for that amount!
You are capable of doing many things to make taxes less complicated when you work in IM. The IRS website is full of useful tips that you can use to make your book keeping and tax preparation tasks easier. If you are earning enough money to do so, you could even hire an accountant to take care of almost everything for you.