Trying to land a great job which gives a good pay is quite difficult to do these days. Not everyone can actually have the job of their dreams with a good salary to boot that’s why more and more people are resorting to having their very own online business to suffice their needs and wants. |
So you want to start your very own online business. Aside from having unlimited access to the Internet, you also need to be armed with adequate knowledge about taxes and your online business because without it, you will surely be at loss.
If you are one of the many people who is interested in starting your very own online empire, you should be aware of the basics of taxes and your online business.
More Than Just Social Networking
More often than not, people initially become exposed to the wonders of the Internet thanks to social networking sites or online games. However, people grow up and their interests expand beyond just meeting new friends and people and they become more interested in exploring the income generating power of the net.
If you just have the know-how on making your own website and promoting your very own webpage, you can actually go a long way in the realm of online business.
Know The Basics Of Starting An Online Business Once you decide to start your very own online business, you have got to ditch your amateurish ways of thinking and move on to more professional and business-like practices.
The first thing you should know when planning to start an online business is that you are not exempted from the responsibility of paying for taxes. Income tax, sales tax, use tax - those are only few of the different kinds of taxes that you might encounter once you start your online business.
The second thing you should consider is what specific kind of online business you would want to start. Do you want to sell clothes online? Do you want to sell your painting online? Or maybe you would like to buy and sell pre-owned stuffs? Well, whatever kind of online business you would like to have, just make sure that you coordinate it with the laws and regulations of your state.
Your website or webpage should also have its own terms and conditions. If the law in your state requires you to make the customers pay for tax for the items that they would like to purchase from you, don’t forget to make your costumers aware that they will be paying an additional tax for the items that they will purchase from you.
That way, your customers or clients will be impressed by the fact that you are so open and honest with how you handle the fees and income of your website.
Never Try To Dodge Your Tax Responsibility
The best way to ruin the future of your online business is to try and avoid your responsibility as a tax payer. When you start your very own online business, do try to consult a lawyer or your local government town hall for assistance on legal matters.
No matter how small you think your online business may be, there will always be a corresponding tax payment for your online transactions.
The truth is, a lot of e-tailers are required by the government or their state to file and remit sales tax to states on either a monthly or regular interval. The basis for the filing of sales taxes would more or less depend on how much revenue you online business generates.
The Responsibility To Pay Sales Tax
Admit it, nobody really loves to pay taxes. Perhaps even the rich people are irritated come tax-paying time because it is sometimes a tedious and complicated process. There are a lot of rules and laws to refer to before one can actually come to a clean calculation of the taxes that he or she must pay.
If an individual lives in a state that is known for collecting "sales tax", you are not exempted from it even though you try to escape it by making a lot of purchasing through the Internet because you are still required to pay for the "sales tax" directly to the state.
When you pay a "sales tax" directly to the state, it is no longer called a "Sales tax" but rather a "use" tax. Perhaps the only difference between "sales" tax and "use" tax boils down as to which person - the buyer or the seller - pays the state. "Use" taxes are usually used by the state to make sure that they collect the right amount of revenue on every taxable item purchased within the state borders.
Few Basic Tips For E-tailers
It is very vital that you understand your responsibility for sales tax. You must also know that the idea that e-commerce companies are required to collect and remit sales tax in every state is one big myth.
You only have to pay sales tax if you have nexus in that certain state. If you are a neophyte in online business, perhaps you don’t have an idea what the word nexus means, right?
Well, in online business jargon, nexus means a "connection". Put in application, making a sale in another state does not mean that you automatically have a sales tax obligation.
You have to put in mind that there are many rules and laws that you need to consider before you can determine whether or not you will need to pay for sales tax in a certain state.
When you create your very own nexus in a certain state, you are then required to calculate, collect, report and remit the sales that you make in that certain state every time you have a transaction there.
This is the reason why you are obliged to pay tax sales based on the location of your business.
However, you must also keep in mind that there are also other ways to create your very own nexus in a state. Aside from physical presence or structure of your business establishment in a certain state, you can also establish a nexus by having sales representatives present in that state, tradeshows, mobile stores, etc.
However, one must not lose hope; with the help of professionals in the legal field and certified public accountants, you will surely be enlightened as to what steps you should take for your online business to stabilize and prosper.
By being armed with the right knowledge about taxes and your online business will surely help you achieve success in the realm of online businesses.
Be sure that you are aware of the different states that are offering tax-free sale transactions as well as the states that have different tax collection percentages. In issues that concern taxes and your online business, ignorance is definitely not an excuse so you might as well gear up and fill yourself with adequate knowledge for your online business to prosper.
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