Many times, when talking about Internet marketing tax, it is not a good idea to think of it in isolated terms.

One of the biggest and most potentially deadly misconceptions about Online Marketing is that it is a tax free market. Individuals enter it believing that since the money they earn comes to them largely through online sources like PayPal that they don’t have to pay taxes on the things that they’ve made. It’s totally bogus! More importantly, failing to pay taxes on this income can get you into all kinds of trouble! Do not panic, though: it’s not difficult to do taxes when you are an online marketer. Here are a few things that could help you.

1. Get an appointment at your local Small Business Association. All communities have some form of small business helping association or organization (typically run via a local community or city college) that has a lot of trained experts on hand to help you both set up your business and ensure that all of your tax issues are carefully and correctly taken care of. The great thing is that this useful resource is almost always without charge.

2. Monitor everything. Say it once more: monitor just about every last detail. This is pretty simple to do via Excel. Create a spreadsheet and report every last cent you generate with your Internet Marketing business and also one that tracks each cent you spend on your IM efforts. Make sure you keep each and every receipt and invoice for the money you spend.

3. If you could afford it, retain the services of an accountant. This would allow you a bit of freedom in the tracking of all of your taxes and online business numbers. You tell your accountant what you’ve earned and paid out (be sure you can prove this with official documentation) and they take care of everything else–especially during tax season.

4. Put money toward the taxes you could possibly owe at the end of the year. A good principle is to pay 30% of every sale. This can be accomplished every 3 months or even each month by making Estimated Tax Payments to the IRS. The IRS today has the capability to get estimated tax payments if you think or want to make them. This will keep you from having to pay a gut wrenching amount at the end of the year (which, if you haven’t saved up for it, will be particularly stressful). Better yet: if you have overpaid in your estimated tax payments, you will get a refund — just like you would if you were working for an employer! Be sure you consult with someone at the IRS to get this set up correctly.

5. Find out about all your allowed deductions. When you operate your own business a lot of things including your utility payments, etc are tax deductible (as is any money you spend on business equipment or supplies). Your accountant or someone from the IRS can help you determine what all you can write off when it’s time to pay taxes.

It is not all that hard to become intimidated by the idea of having to pay taxes when you are a web marketer. Thankfully, there are all kinds of resources available to help you observe the law and still keep yourself from losing your shirt to the IRS!

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