Successful Online Selling
 

How to Track And Pay US Taxes

a guide to paying taxes in usaIf you have an online business, you might be wondering how you can pay your tax obligations promptly. You probably want to know how you can track your expenses, keep perfect records and probably, learn of any tools that may be useful in this regard.

It’s very important to comply with federal tax obligations, both from a legal and ethical perspective. In this article, you will be introduced to some basics of tracking and record keeping for tax purposes.

Tracking your expenses

This is particularly not easy if you have a number of online businesses. You can employ an accountant but prepare to fork out a fortune in wages. If your online business empire is big, an accountant is almost always a must.

Alternatively, you can use tracking software. Just ensure that you provide every possible detail about each transaction, such as who you paid, who paid you, method of payment, reason for the payment and most importantly, the date of transaction. You’ll find that it might be possible to keep your records in a simple spreadsheet if you are willing to do the ‘donkey work’, especially if your business is relatively small. For more tools to help you out on your business, you might want to check out our section of ebay seller tools...

Remember, another factor in expense tracking is keeping physical records – receipts, statements and printed e-bills. There’s simply no room for guessing and estimating here. Put these in neatly organized folders marked by year. You might be required one day to go through these records years down.

 
Getting to know your deductions

tax rebatesIf you’re familiar with wholesaling, you know that wholesale companies make at least one trip to the mail delivery service every day: what you might not have known is that you can track your vehicles mileage and write that off your taxes.

There are tons of small deductions that you can make the most of to reduce your tax bill. For instance, if you’re a wholesaler on eBay, you can make a deduction on your home office, and this is one of the biggest deductions.

A portion of your rent and utilities can be slashed off. These small deductions can eventually add up to thousands in tax savings. Note that home office deductions can easily prompt an IRS audit so you ought to be very careful. Consider these tips for home office deductions:

• Take photos of your home office and your home as well. This can prove vital in proving the space your office occupied, if you happen not to live there anymore.

• Make sure your office supplies are different from your home supplies and keep careful track of them.

• All space you use for work must be regarded as office space, including places where you store and organize packages for shipping.

Paying your taxes

If you’re a small or medium-sized business owner, it might make more sense to use a software package – such as Turbo Tax – to pay your taxes. Professional preparation might prove too costly for you, even if you rake in six-figures. You’ll be able to maintain good records and learn about all the possible deductions, and your tax filing will be a smooth process.

A word of caution: if you’ve just started out in internet business, you will probably have to pay quarterly taxes. So you need to be prepared. In the case that you paid your taxes in April, you’ll also be required to pay that year’s first quarterly taxes. Small business owners almost always owe money or have transactions on credits; so ensure that you save some money for tax season.

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