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.
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.
Very minimal manual labor is needed in an online business and one can even get to work at home in their pajamas while managing their online business.
You need to consult with the IRS people first before you can truly say that you are exempted from paying taxes while you are participating in your online business.
There is actually no big difference between the tax responsibility of an online business and any other business. 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 have your so-called online business, you should be aware of the rules of the IRS: one is required to pay taxes on all business and personal income and that includes the dough you make selling stuffs on the Internet.As heartbreaking as this may sound, even the simplest business transaction made through the Internet needs to be reported as “income”.
For example, you bought an exquisite looking flower vase at a flea market for $ 5 and then you decide to sell it an eBay for $ 20. You manage to sell it for $ 20 so that means you had a $ 15 profit which would then entail you to report it as income and pay your taxes as fair share.
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.
However, if you are a consistent chap at eBay, then the IRS people might categorize your eBay participation as something that is business oriented and you may end up being required to file a Schedule C form and claim the income that you have spurred.
Dealing with an 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.
By Maialisa from Pixabay