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Wednesday, July 30, 2014

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.


Comments
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As a small business owner this kind of news makes me want to just throw in the towel. Internet sells are our single biggest source of revenue for our business.

The American dream is being killed by the government. As a small business, I am already paying income tax, use tax, sales tax, and (the one that makes me the maddest) personal property tax.

Just the extra burden of keeping track of all the paperwork and calculating the payments alone is enough to make you sick. Then, what profit you do make ends up being consumed by the government.

Why even try?

-- Posted by Liveforlight on Wed, Mar 10, 2010, at 6:04 AM

It is mind boggling that many (not all) people keep wanting the government to do more for them but do not understand that this means taxing us more. If businesses pass the tax along, they are accused of gouging or lose competitive edge to those who are avoiding the tax in some manner.

When we elect lawmakers who either don't understand, think business has bottomless pockets (maybe because they have never run a business themselves) or don't care, what should we expect?

-- Posted by stevemills on Wed, Mar 10, 2010, at 7:40 AM

Absolutely! I want the government to shrink in size and scope not grow.

We are headed down the path that has already ruined many nations.

Increased taxes and the accounting burdens that go with them makes it hard for someone like me to break the chains of poverty and live the American dream.

I was rasied as a Democrat and was taught that the Dems. are for the poor man. I now see that their tax and spend policy works to keep a poor man poor.

It is mind boggling that the richest most prosperous nation on earth seems so eager to adopt the policies of other failed government systems and turn our backs on the freedom and personal responsibility that has made this prosperity possible.

I would like to establish a business and be able to pass it on to my children. The government makes it harder at every turn and we wonder why we are loosing our jobs.

Politicians ppoint the finger at fat cat bank executives, wall street, and insurance companies. The real problem is the fat cat politicians. At least with banks, investments, and insurance I have a choice.

The only choice these business taxes leave me with is to pay it, or get out of business. The frustration level makes getting out of business and applying for government aid more alluring than working. Ultimately, this what will eventually destroy the country.

You can only go to the well so many times before it dries up.

-- Posted by Liveforlight on Wed, Mar 10, 2010, at 10:12 AM

I'm still annoyed that Tn has the highest fee for filing an LLC.

Property taxes, income taxes, professional licensure fees and insurance, and excise taxes take a good chunk of change and all but one of these are required if the business makes a buck or not.

-- Posted by gottago on Wed, Mar 10, 2010, at 7:20 PM

Yeah the LLC is quite expensive. My license as a sole prop. doesn't cost much... yet. Mainly because I don't have that much in income from the business:(

Knowing the tax man is waiting to collect on my profits, at a rate that outpaces my increase in revenue, kills my desire to do more.

The extra burden of keeping records, reporting, and paying for all of these means less time and money I have to actually work on growing the business.

Then, of course, I will have to pass on the cost of taxes to my customers if I want to stay in business.

The internet has been the one bright spot, just as Steve said, and now that is beginning to dim.

-- Posted by Liveforlight on Wed, Mar 10, 2010, at 10:28 PM


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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.