All of the money you make through your Internet Marketing efforts is taxable and must be reported to the IRS every year. If someone tells your anything else; they are not being truthful and will likely get in trouble with the IRS themselves. Pay no attention to them! Not reporting income or paying taxes is just an excuse for being frightened of them. The good news is that you do not have to be afraid of your taxes or the process of paying them. Tax preparation can be frightening and overpowering, but we will be giving you a few helpful hints that will make it less overwhelming.
When you pay for things, do not throw away the receipt. Did you buy a cup of coffee for a client during a meeting? Did you have to get new pens and pencils for your new office? Were you required to update your old computer software package? All of these are allowable business expenses but you need to be able to prove that you made them. This is why all purchases must be tracked. Indicate the purchase of the expenditure and make sure the receipt is in a safe place. If the amount you claim on your taxes is different than what would be added up from the receipts you have on hand you'll get in trouble. So, do not throw away any receipts. It might seem messy, but it is worth the mess.
Make sure that you report your income accurately. IRS will audit you if your reported income is different from the totals on the 1099 forms. There is the option to calculate your tax amounts in an excel spreadsheet if you do not like to do math. You have to put down all amounts, so do not get the urge to round down your numbers. The Internal Revenue Service will monitor things such as this, so do not get caught doing the wrong thing.
Keep a record of your medical receipts. As an IM'er you probably fail to have health insurance. But, you are still paying out of pocket for medical expenses. Maintain a log of the cash that is spend on dentists and doctors. The rules on these types of expenses are varied, so you might want to talk to the IRS about them. Don't just assume you can write off every penny. But, some of it may be able to be written off and reduce the amount of taxes you owe. Online marketers have numerous components that must be monitored on a daily basis. Taxes are just another thing that IM'ers much track. If you track your expenses properly, then hopefully you will not run into any problems. Keep in mind that there are pros available to give you help.
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