Will My Online Earnings Be Taxed? - Important News

More and more people are drawn to the thought of running an internet business through the perception that whatever income attained on the internet will be exempt from taxation. This regrettably is a prevalent disbelief in view that those who own internet businesses are still required to pay their tax dues.

In reality there's been considerable controversy behind internet businesses and taxation leaving many of the entrepreneurs who begun their online businesses with this false perception wishing they had done their due diligence before starting out.

"But I Am Working At Home"

And Other Pointless Excuses Not To Pay Taxes

With an influx of individuals now working in the comfort of home and receiving earnings from their online endeavors the obvious pretext is that given that they acquired the income at home they don't have to pay taxes. These people fail to realize that taxes are actually centered on the sources and quantity of the income in addition to the kinds of products and services sold; not on the location of the business.

With that in mind you should fully grasp that you are certainly required to pay your tax dues even when you earned it online.

Internet Tax is paid in the same manner every other business pays tax. As a matter of fact the government does not collect income taxes based on how a business works but rather it concentrates on the type of business.

If your business is based on the Internet you still have to register for GST and PST (if appropriate) the same as any other business. Based on the framework of the enterprise, sole proprietorship or incorporated, you'll still need to fill out the required documents so that your online business could be deemed as legal and so that you can pay the proper taxes regularly.

There is really no big difference between the tax responsibility of an online business and any other business.

Online Businesses And Federal Taxes

Even when you operate an online business you are still required to pay federal taxes. It may seem unfair to you but it is crucial that you understand this upfront rather than find out at a later point that you owe money to the IRS. The federal taxes that you need to pay will vary according to your business framework.

If your business is set up as a sole proprietor for an online business any revenue you earn through your online business is going to be taxed as income on your PTR or personal tax return.

Aside from that you will need to pay for your part of social security and medicare taxes using schedule SE.

On the other hand in case you have incorporated your business the tax schedule will be very distinct from a sole proprietor of an online business.

At times, the tax you have to pay as an incorporated online business will also depend on the kind of business. You'll either pay tax at a corporate level or it will be handed down to you as an income.

Mastering taxes as it applies to your online business can be quite perplexing but it is critical to get a picture of what is needed that allows you to minimize complications down the line. You might want to seek professional advice from a lawyer or public accountant if you're not 100 % certain what taxes are required for your online business.

Obtain free access to a List of Business Tax Deductions and get answers to pressing questions concerning business tax filing

5 Ways to Prepare and Organize Yourself for the Dreaded Tax Season

You've probably heard the saying, "The best defense is a good offense." This is a relevant saying when it comes to preparing for the dreaded tax season. For those who lose sleep as the April 15th tax filing deadline looms, it's especially important to do a bit of homework throughout the year to save you from months of anxiety leading up to April 15th.

Here are five ways to prepare and organize yourself for the dreaded tax season.

1. Divide and conquer.

Fortune 500 companies are obligated by the U.S. Securities and Exchange Commission (SEC) to submit quarterly financial reports to keep shareholders and other relevant players abreast of their performance throughout the year. Take a cue from these successful companies and divide your year into seasons (instead of financial quarters) to keep better track of your finances throughout the year.

In summer, organize your records. Make sure your filing system is up to snuff and is complete with updated records.

In autumn, estimate what your annual income will look like at the end of the year, as well as your taxable income. You should be able to estimate your taxable income, so you know if you're behind on tax payments.

In winter, prepare to file your tax return. Make sure needed records are complete and readily available. Also, gather any tax forms you'll need. Separate pertinent receipts from those you won't need.

In spring, file your taxes! If you've followed the guidelines above, this should be a breeze.

2. Keep good records.

This may seem redundant, but it can't be emphasized enough. If you keep good records throughout the year, you'll have an easier time come tax season. Additionally, keep certain types of documents secure: birth certificates, wills, deeds, and bond or stock certificates.

3. Adjust your W4 to reflect appropriate withholding.

There's a school of thought that believes that if you're paying too much taxes throughout the year (even if you get a large refund at the end of the year) you're actually giving the government a free loan! This is because you could be saving the difference each month to put into a savings account that's earning you interest instead. However, if you lack self-discipline, you might want to think of receiving a tax refund as a forced savings plan. Whether you'd rather adjust your W4 to get a refund or pay as little as possible toward taxes each month to maximize your income and minimize the taxes paid is up to you.

4. Keep receipts.

Keeping receipts will give you ammunition if you get audited. Pertinent receipts include paycheck stubs, 1099 or W2 forms, receipts for deductible items, records of charitable donations, and medical and insurance documents, among others.

You can also use software like NeatDesk to electronically keep track of your receipts, too.

5. Pay your taxes before April 15th.

The IRS charges penalties if you don't pay estimated taxes throughout the year. Therefore, adjust your W4 withholding amount appropriately during the year to keep the IRS at bay. If you're unsure how much to withhold, use turbo tax coupons to get affordable help with your taxes.

With a little forethought and basic record-keeping skills, you'll feel prepared to file your taxes come April 15th.

How To Deal With Your Tampa Tax Problem

Paying taxes is the cardinal duty of the citizens. But it has been found that several employers as well as employees face numerous problems when it comes to paying the taxes. The main reason behind this is the shortage of information that they have about the tax paying procedure. It is not really easy to understand the financial concepts, but still the tax payers are recommended to acquire at least the minimum required information to avoid the difficulties that they have to face because of their lack of knowledge. The common people possess a right to negotiate on the taxable amount if they find it unsuitable. Several attorneys exist to assist the common public with the IRS Tampa tax problem that they face from time to time.

The most vital factor that makes you suffer from such disturbances is your unawareness of the multiple perspectives wrapped within the concept. You keep on paying the taxes, but never bother how and why are you paying the fixed annuities. You must know and be curious to gain as much knowledge as possible about each and every right and duty that you possess and perform. Most of you expect that the tax officials would come to you and inform you about your right to negotiate for the taxable amounts. But you must know, they hardly bother about how much knowledge do you have. Their only job is to collect the taxes on time even if you are facing Tampa tax problem.

If you really want to negotiate on your tax amount, you can consult the attorneys available to resolve your Tampa tax problem. Once you successfully and convincingly prove your incapability to pay that fixed amount, the IRS official will definitely co-operate with you in reducing it or finding out some other way as per your as well as his convenience.

TAX EVASION

According to Reuters News, the United States boosted it's investigation of taxes last year by 10 percent. Tax authorities also boosted their investigation of other financial crimes (again, by 10 percent).

The Internal Revenue Service is trying to pursue wealthy tax cheats. They reported a 13 percent rise in the number of reviews of what is known as 'legal source' crimes. A 'legal source' crime is a legitimate business by which the income hidden in some way.

Their convictions are also up slightly.They say there was also a 13 percent jump in 'illegal-source' financial crimes. These are crimes from gambling or gun-running. For some inexplicable reason, there was a reduction in their pursuit of narcotics-related crime.

Last year, the IRS had a voluntary amnesty program to encourage tax cheats to come forward without fear of jail time. Last year about 15,000 taxpayers decided to take advantage of the amnesty program.

A Tax Amnesty program provides comprehensive tax relief. Typically an amnesty program has a very short window of opportunity. The goal is to collect as much back taxes as possible in a very short period of time, usually two or three months. The IRS waived penalties if you filed returns and paid your taxes during the amnesty period.

The bad news for tax cheats is that authorities are culling this information to potentially go after other individuals and other financial institutions that may have been helping Americans evade taxes.

I interpret this to mean that the IRS will look at how much money specific businesses make. If a business, partnership or corporation makes over or under the newly created guidelines -- then, that business will be scrutinized very carefully.


Everyone would like to spend less on taxes. Fortunately, the tax laws make it easy. You can reduce your taxable income through various deductions, or reduce your tax liability through various credits.


Here's some suggestions for uncovering the tax breaks that are right for you:


1.Tax Basics -- First of all, we have to pay our taxes. So, plan in advance on what to do. I file my taxes online using "TAX ACT". Any do-it-yourself software program will work for you (either online or just on your computer). If you're not brave enough to do it yourself -- there are many tax preparers out there willing to file for you. There are lots of free places to get your taxes done as well. I know that there's help for Senior citizens, for sure.


2.Filing Status -- Determine your filing status. Filing status determines which tax rates and which standard deduction amounts apply to a specific tax return. If you've gotten married or had a child (including adoption) in the past year, don't forget to include spouse or child.

Seriously, after we had our first child, my ex-husband forgot to add our son as a dependent!! I had even named the boy after him and all. It can happen. Also remember to change your filing status if you've recently gotten divorced (me!). Persons that are not married but are raising the children on their own are considered to be a "Head of Household". They would need to pay less taxes.

3.Investments -- Taxpayers who invest in stocks, bonds, mutual funds, or real estate can benefit from lower tax rates on long-term gains. If a person were to shift their investments from short-term gains to long-term gains, you could lower your taxes quite a bit. Homeowners have many tax advantages available to them. Oftentimes, annuities are not taxable. Be sure and get some good tax advice before you invest.


4.Some Tax Breaks -- When an investment is valuable and cost a chunk of money, it also comes with a tax savings. The following are some expenditures that may also come with a tax benefit: Capital Gains, Capital Losses, with short and long-term holding periods, Capital Assets, and the sale of your home.

I'm not a tax accountant. Taxes are confusing to everyone (even tax accountants). Be sure and do your research. Most people already know most of what I've gone over here. But, if you don't -- study up. And, remember,the government is finding more ways all the time to catch tax cheaters. So -- Please!! Do NOT cheat on your taxes.


Guest Author:Meghan Furst an insurance agent.I have a blog @ htttp://www.needabandaid.com. Please stop by,read my articles and COMMENT.Or ask questions.I Love questions and will personally answer them.