Some internet marketers are not clear on the laws related to divulging their Internet Marketing income to the IRS. Folks always say this is not required.
This detail will never change. All proceeds that are received from your Internet Business are qualified as part of your yearly earnings. This income is not exempt just because you made it on the internet. You definitely will be required to pay taxes on the money you make through Internet Marketing, and you will probably find it much more difficult that when you had a boss who did that for you. Below, you will find a wealth of information regarding this subject.
Figure out whether or not your clients need to fill out 1099-MISC forms. In some years the IRS has required a 1099-MISC form from any client who paid you more than six hundred dollars over the course of the year. See if the IRS will be needing these form this year as well. This might not be as easy as it seems if your clients do not pay this full amount of if they are located in another country. Ask the IRS how to handle these situations.
Make sure that you do not report the incorrect amount of income. If the amount you list as income on your tax form is less than the amount that they add up from the various forms that your clients are required to submit, you are going to get audited and that is no fun. If you are not good with numbers, then automate the process with an excel spreadsheet. Do not round up or down your numbers. The IRS likes to monitor small things like this, so be smart and do the right thing.
Very importantly, remember to think about a retirement fund! Regardless of how you support yourself, even with Internet Marketing; you need to protect your future with a retirement fund. They help you save for the future and they can, depending on which kind you have, reduce your tax liability by quite a lot. If you have an IRA, you will have a significant tax deduction. Instead of blindly choosing a retirement plan for yourself; contact experts like your bookkeeper or someone from the IRS that can assist you. This will give you some relief later in life and will keep your tax debt at a minimum.
There are so many things that can make meeting your tax responsibilities easier. Actually, you should never need to feel threatened by your taxes again. Simply by doing a little investigating and probing a little, you or your accountant will be prepared to file your paperwork. You will be surprised how easy it can be, so get with it!
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