Do Not Let Taxes Overwhelm You - Internet Marketing Tax Help

If you are an internet marketer, ignore those who say that you are not required to pay taxes. The Internal Revenue Service considers them to be freelancers and they still have to pay taxes. This means that it is taxable and you need to report it to them. That's the bad news. The good news is that there is no reason to let your taxes intimidate you. This article is going to discuss a few of the things that IM'ers can do to make tax time easier.

The basic rule of thumb when it comes to income you earn through Internet Marketing is that thirty percent of what you make is going to need to be paid to the IRS. This sum will depend on how much you are bringing in. Thirty percent is a great standard to set; so tuck this much away every time you make a little money. You can keep it in an account to pay all at once or, better, you can send it in to the IRS as an estimated tax payment. Paying the estimated tax payments will lessen the burden considerably when it is time to pay up. If you paid more than you owed, you will be reimbursed!

Be mindful of the three out of five rule.

This is a basic rule of thumb that says that the IRS expects freelancers and entrepreneurs and sole proprietors (all designations given to Internet Marketers) to turn a profit at least three out of every five years they do business for themselves. If you consistently show a loss or no profit; the IRS will be looking into your business. If you are reporting everything accurately, you should be fine, even if the IRS wants to see proof of your income and expenses. It is not a good idea to try and be sneaky when reporting your income; you may face a very negative penalty as a result.

Record all of your medical expenditures. Since you are a freelancer, you might be lacking health insurance. But, you are still paying out of pocket for medical expenses. Keep records the money that you dish out for dentists and doctors. The rules on this vary greatly so it is best to do some research and talk to someone at the IRS. Don't make the assumption that everything can be written off. But, some of it may be able to be written off and reduce the amount of taxes you owe. When Internet Marketing is how you make your living; it is critical to that you report your income to the IRS when they ask for it. It is basically up to you as to how hard you want this to become. The most frequent mistakes that are made are when a person tries to take on more than they are ready to handle. If you are able to arm yourself with an adequate education about the process, you should do well. It is not necessary to struggle over your taxes; they are not that difficult!

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