***Disclaimer***
I am not an accountant, nor do I pretend to be one. My intention is not to give you accounting advice.
My intention is to make you aware of various issues that becoming a business owner brings about, so that you know what questions to ask and try to get answers to from a person who is more qualified than me and knows your individual situation better than me.
***End Disclaimer***
As I mentioned on the description page internet marketing is a business. Although some people treat it like a hobby(I'm probably the guiltiest person of all for doing this) it is in fact a business.
You might be wondering:
How is it a business if I'm not making any money?
This is a fair question and the answer is relatively simple. You're in "start-up mode". You are in start-up mode up to the point when you make your first sale/commission. It doesn't have to be a profit it just needs to be income from your business.
How can it be a business if I don't have an LLC, C-Corp, or S-Corp?
While those are some traditional corporate entities that people form when setting up a business, there is one form of business that you get automatically without doing anything and that is called a sole proprietorship.
What It All Boils Down To
When you make money the governement wants to tax it. Doesn't matter where it came from, how you got it, they want to take your money. ;)
On the next page I will talk about three different types of taxes you need to be aware of.
I am not an accountant, nor do I pretend to be one. My intention is not to give you accounting advice.
My intention is to make you aware of various issues that becoming a business owner brings about, so that you know what questions to ask and try to get answers to from a person who is more qualified than me and knows your individual situation better than me.
***End Disclaimer***
As I mentioned on the description page internet marketing is a business. Although some people treat it like a hobby(I'm probably the guiltiest person of all for doing this) it is in fact a business.
You might be wondering:
How is it a business if I'm not making any money?
This is a fair question and the answer is relatively simple. You're in "start-up mode". You are in start-up mode up to the point when you make your first sale/commission. It doesn't have to be a profit it just needs to be income from your business.
How can it be a business if I don't have an LLC, C-Corp, or S-Corp?
While those are some traditional corporate entities that people form when setting up a business, there is one form of business that you get automatically without doing anything and that is called a sole proprietorship.
What It All Boils Down To
When you make money the governement wants to tax it. Doesn't matter where it came from, how you got it, they want to take your money. ;)
On the next page I will talk about three different types of taxes you need to be aware of.
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k1nl1
Premium
That is indeed a really good and helpful article. I have a question thou. Do you have an idea how it goes if you are constantly traveling? I am not in that position yet, but my idea is to focus on internet marketing and other similar ventures and be able to travel while doing so possibly for more then 3-4 years. This means constant moving from one month to the next and I can imagine that would complicate things.
I see you have experience with cross country income tax situations as you were a Colorado resident officially, but had to register as well in Hawaii while conducting online business there. Do you think that I have to register in every country as a sole proprietor to be able to operate or is there another possibility?
I see you have experience with cross country income tax situations as you were a Colorado resident officially, but had to register as well in Hawaii while conducting online business there. Do you think that I have to register in every country as a sole proprietor to be able to operate or is there another possibility?
nathaniell
Premium
Do you know if we could be required to pay the 'sales tax' portion considering we're not actually SELLING the product? I mean, as affiliates, we are intermediaries making a commission off of a transaction where we are neither buyer nor seller.
Great tutorial, and it's got me thinking about tax season coming up.
My method is that I only use my Paypal account to pay for things related to my business (99% of the time). I have my Paypal connected to Outright, which is not connected to any other financial accounts. That way, Outright tells me how much I'm making, how much I'm spending, and all transactions are listed. It was a life saver last year when I had to look over where I spend money and on what.
Great tutorial, and it's got me thinking about tax season coming up.
My method is that I only use my Paypal account to pay for things related to my business (99% of the time). I have my Paypal connected to Outright, which is not connected to any other financial accounts. That way, Outright tells me how much I'm making, how much I'm spending, and all transactions are listed. It was a life saver last year when I had to look over where I spend money and on what.