When you make money via your Internet Marketing endeavours that money counts as income. That income must be reported to the INTERNAL REVENUE SERVICE and you also have to pay taxes on it. Sadly, making cash on the web is not tax-free. Don’t trust any individual who tells you otherwise. After all, you don’t wish to end up in trouble with the INTERNAL REVENUE SERVICE do you? There aren’t that many things which are more frustrating or stressful than getting audited. Obviously, if you haven’t ever had to take care of your own taxes previously, mastering how to account for your income and expenses and the sum that you owe can be really confusing. Here are a few ideas to aid you.

You have to be sure that you keep very careful documents of the amount of money you make. Make sure your own records include a lot of details. Write down each transaction you get, who paid it to you and what the payment is for. Be sure to record the particular date also. These records can be kept in a home accounting program like QuickBooks or you can use a method that you set up yourself. Some people find a straightforward Excel spreadsheet works best for them. Don’t simply toss out these records right after your taxes have been submitted. You need to keep them available for, at a minimum, a few years just in case someone from the IRS asks to see them. Some say that, after 3 years, if you haven’t yet been audited you should be okay, but check with the local tax rules of your state.

Save each of the receipts and invoices for any money you pay out. In IM a lot of items can be deducted for business purposes. Website operating expenses, to apply one example, can generally be claimed on your taxes. You can also often deduct the money you spend on your company supplies. Have you attended a convention this year? You might be able to deduct some of your travel expenses as well as the cost of the conference itself. Sometimes even some of the money you place toward your internet bill may be deducted as well. Make certain you keep all of your receipts and copies of paid bills so that you’ll have got a document proving what you spent.

Pay taxes throughout the year. Internet Marketing is commercially deemed freelance work and freelancers often pay their taxes quarterly so that, when the end of the year shows up, they do not owe as much. A great amount to pay is thirty percent of what exactly you generate that quarter. The IRS has a system in place now that will even let you make payments each month. Keep records of what amount you pay in. When you file your annual tax forms, in case you have accidentally paid too much into the system, you will be issued a refund for what you have overpaid!

There are a lot of ways to help to make tax time a lot easier when you work in the IM market. You can find lots of great tips on the IRS website that are designed to help you streamline the whole process from book keeping to tax prep. You might also look at, if you have the money, hiring an accountant to take care of all of that for you.