Useful Tax Information for Internet Marketers

Yes, you do have to pay taxes on the money you make as an Internet Marketer! If you have heard anything else, then it is not true. No, you won't be able to get anything by the IRS. If they suspect that you are doing something wrong, then you can expect to be audited. But, do not obsess about this. If you do not lie about your income and expenses, then you should be fine. Also, this will mean that you have to pay the correct income tax annually. Don' t let all of this scare you. These suggestions can help you with your taxes.

It's a good idea, if you can afford it, to have a professional accountant handle your income and expenses. An accountant will be able to do the checks and balances better because you are not trained in those areas. They will also have the ability to keep your bookwork and tax information current and done correctly. Essentially, when you use an accountants services, you simply collect all of your paperwork and give it to them to take care of. It is really the ideal situation.

Be aware of the three out of five rule.

The IRS has given names to three types of Internet Marketers, these are freelancers, entrepreneurs and sole proprietors; the general feeling of the IRS is that these people will probably make money no less than three out of each five years they are in business on the internet. If you rarely show a profit, the IRS will be wondering why you are staying in business when you are not making money. When you are able to keep meticulous records, you should not have any concerns if the IRS takes a notion to check your bookwork. Some people try to shuffle some numbers so they will not owe so much in taxes; you will likely not get away with it and will suffer dire consequences.

Record all of your medical expenditures. As a sole proprietor/freelance entrepreneur (the designations given to Internet Marketers) you probably do not have health insurance. But, you still have medical bills. Track all money and receipts for dental and medical bills. Since many of these rules are not set stone, ask a pro about which ones apply. However, you should know that you probably will not be able to deduct everything. But, you can probably claim some of it and reduce your tax amount.

Your tax obligations can be managed efficiently if you take the time to do a little research. As overpowering as your taxes have always been, there is really no need. Your tax preparation should be a breeze for you or your bookkeeper to take care of with a bit of checking and a little exploration. It is not as complicated as you may think, so take the plunge!

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