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The Tax Man (or woman) cometh! Taxing internet income is around the corner.Posted Sunday, March 7, 2010, at 8:35 AM
We all knew it would eventually happen. Internet sales was one of the few bright spots in the economy this year, so who thought the Government would miss the bright lights? Regardless of what you think about taxes, it will eventually become a reality. Once the Fed has put the mechanics in place, I would expect the States to climb on board. http://www.irs.gov/pub/irs-dft/f1099k--d...
For many of us, that may not be a big deal for now. We either already declare our income or we make less than $20,000. But that threshold dollar figure is NOT profit! It is the amount processed by credit cards, debit cards and virtual credit like PayPal.
That means you need to keep track of shipping costs, selling fees, processing fees and monetary exchange if you sell overseas. Then figure your computer, any classes you've taken, internet expense, office space, shipping supplies, printer, paper, transportation to the Post Office or to get your supplies, etc.
Again, not a big deal if you are already keeping track of these things, but if not, there is a learning curve ahead. Get some good business advice on taxes and record keeping. (No, I am not a tax consultant)
If you are just selling a few odds and ends around the house (yard sale stuff), you are probably not going to be affected, but $20k in transactions is more than a yard sale and Uncle Sam is hungry.
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Steve Mills and his wife have one daughter and live on a farm outside of Bell Buckle. They previously owned two coffee/ice cream shops, currently operate an internet sales company and teach classes, but his primary job involves the paper industry worldwide. Hobbies and interests lie in gardening, photography, recorded music and of course, their pets.
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