Trying to land a great job which gives a good pay is quite difficult to do these days. Not everyone can actually have the job of their dreams with a good salary to boot that’s why more and more people are resorting to having their very own online business to suffice their needs and wants. If you are one of the many people who is interested in starting your very own online empire, you should be aware of the basics of taxes and your online business.
More Than Just Social Networking
More often than not, people initially become exposed to the wonders of the Internet thanks to social networking sites or online games. However, people grow up and their interests expand beyond just meeting new friends and people, and they become more interested in exploring the income generating power of the net.
If you just have the know-how on making your own website and promoting your very own web page, you can actually go a long way in the realm of online business.
Know The Basics Of Starting An Online Business Once you decide to start your very own online business, you have got to ditch your amateurish ways of thinking and move on to more professional and business-like practices.
The first thing you should know when planning to start an online business is that you are not exempted from the responsibility of paying for taxes. Income tax, sales tax, use tax — those are only few of the different kinds of taxes that you might encounter once you start your online business.
The second thing you should consider is what specific kind of online business you would want to start. Do you want to sell clothes online? Do you want to sell your painting online? Or maybe you would like to buy and sell pre-owned stuffs? Well, whatever kind of online business you would like to have, just make sure that you coordinate it with the laws and regulations of your state.
Your website or web page should also have its own terms and conditions. If the law in your state requires you to make the customers pay for tax for the items that they would like to purchase from you, don’t forget to make your costumers aware that they will be paying an additional tax for the items that they will purchase from you.
That way, your customers or clients will be impressed by the fact that you are so open and honest with how you handle the fees and income of your website.
Never Try To Dodge Your Tax Responsibility
The best way to ruin the future of your online business is to try to avoid your responsibility as a tax payer. When you start your very own online business, do try to consult a lawyer or your local government town hall for assistance on legal matters.
No matter how small you think your online business may be, there will always be a corresponding tax payment for your online transactions.
Be sure that you are aware of the different states that are offering tax-free sale transactions as well as the states that have different tax collection percentages. In issues that concern taxes and your online business, ignorance is definitely not an excuse so you might as well gear up and fill yourself with adequate knowledge for your online business to prosper.
Perhaps the most common misconceptions about taxes and your online business is that the two are not related to each other. Most people think that online businesses are not really taxed that’s why more and more people are becoming attracted to start their very own online business.
If you are one of the many people who is interested in starting your own online business or if you already have an online business of your own, then for sure you have heard about the controversies about online businesses and taxes.
Most people who don’t really have a stable background about online businesses and taxes would most probably guess that owners of online businesses are able to be exempted from paying taxes.
However, in reality, online businesses are still covered with tax dues.
“But I Am Working At Home”
And Other Lame Excuses Not To Pay Taxes
The most common excuse of people who have online businesses who wish to ditch paying taxes is that they are “working at home”. What most people don’t realize is that taxes are actually based on the sources and amount of the income as well as the types of services and products sold; not on the location of the business.
So whether you are working at home, in a store or in a warehouse, you are still obliged to pay for whatever tax is due to you.
Internet Tax Is Just Like Any Business Tax Basically, online businesses are taxed just like any other Business. The government does not actually collect income taxes based on how a business operates but instead, it focuses on the form of the business.
A business based on the Internet still has to register for GST and PST (if applicable) just like any other business. Whether your online business is a sole proprietorship or incorporated, you will still need to fill up some important forms so that your online business can be deemed as legal and so that you can pay the proper taxes regularly.
There is actually no big difference between the tax responsibility of an online business and any other business.
Online Businesses And Federal Taxes
If you have an online business and you are wondering if you still need to pay federal taxes, the answer is yes. But before you go around and complain about the unfairness of the world, you might as well learn more about the federal taxes that you need to pay.
If you are a sole proprietor of an online business, any income you earn through your online business will be taxed as income on your PTR or personal tax return.
In addition to that, you are also obliged to pay your portion of social security and medicare taxes using schedule SE.
However, if you have incorporated your business, the way of paying taxes will become slightly different compared to when you are the sole proprietor of your online business.
Sometimes, the taxes you pay as an incorporated online business will also depend on the kind of organization.
It’s either you will pay tax at a corporate level or it will be passed down to you as an income.
Dealing with taxes and your online business can be quite an ordeal if done alone so it would be much better if you’d contact experts regarding this matter such as a lawyer or a certified public accountant.
CONCLUSION
Millions of individuals all over the world are desperately seeking a way to make some extra money from home. For them earning a living from the comfort of their own bedroom is their ultimate dream. There are many disadvantages to having to leave your house to work. In the other hand the benefits are endless if you can get substantial profits from your home business.
There are many things you can do if you want to start working from home. I could list here at least one hundred different business ventures you could get into. The point is that based on my own experience and that one of many others, I can honestly say that what has worked for me is the Internet. If you are serious about earning a living this way, then you must consider how much will the World Wide Web help you achieve your goal.
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