Your Questions About How To Do Business Taxes Online
William asks…
What about Small Business Taxes?
When I start a small online business how do I pay my taxes? Do they come and hunt me down? Do I have to file a certain form? If so, what form? And what percent do they take out of my income?
Jere answers:
Assuming that you are in the US, you file Form 1040 and attach Schedule C. If the net profit in Schedule C is more than $400, you attach Schedule SE to figure the self-employment tax.
The SE tax is roughly 12.2% of your first $106,800 of net profit for 2011 but will return to 14.16% in 2012. Above $106,800 it drops to roughly 2.6%. Income taxes depend upon your total income and individual tax situation so it’s not possible to predict without some hard numbers and other information up front.
Any time that you are considering starting a business, one of your first stops should be a consultation with a CPA or EA to set up your bookkeeping system and get a handle on your potential tax liability up front.
Joseph asks…
about tax for online business?
I am wanting to start a yahoo store front for selling products online……I know that I will be charging for tax….my question is, how do I make sure I get that money to the government without waiting till the end of the year and owing thousands of dollars…..i know this may sound stupid but I am a newbie…..for example, lets say I sell something for 10 dollars and after tax its like 11.12 with tax……what do I do with that 1.12 of tax? Is there a way to instantly give that tax money to the government? Maybe stupid question but I am trying to learn about all this stuff
Jere answers:
For sales tax, you only need to charge sales tax to the people that buy products in the states that you operate in. So if you live in Texas (for example), and operate your business in Texas, and if Texas has a sales tax, then you need to charge sales tax to Texas shipping addresses. If your business operates in a city that charges sales tax, then you have to collect the city sales tax as well.
In order to pay taxes, you need to get a business license from your state. Depending on where you live, you need may need a city business license as well. In my state, I file and pay my taxes online at the end of each month.
If you really are operating your business in Texas, here is a link to apply for your sales tax permit.
Http://www.window.state.tx.us/taxinfo/sales/
James asks…
How do I file tax if I’d do business online?
Hi, I was doing business on a website call www.liquidation.com. but I don’t know how to file the tax because I’m doing it on my own without registering any of companies. Could anyone tell me how I file the tax? Usually liquidation will send the sales report including commission but it doesn’t send the form 1099. Thank you very much!!
Jere answers:
You are self employed. You must file your tax return if your self employed income is $400 or more. You will report your income and business related expenses on schedule C or C-EZ (Form 1040). Then you put net income (or loss) on line 12 of Form 1040. This income is subject to SE tax at 15.3% (this is shown on line 57 of Form 1040).
Laura asks…
Starting an online fabric business, where to buy,getting a website, need some help?
I’m thinking of starting a fabric business online for extra money. I’d like to sell on ebay but also have a fabric store online & run this out of my home. I would be able to monitor it from work as well. Does anyone have any ideas on how o get this started up & would you have to get a business license or just a tax id?
Jere answers:
I’d recommend starting on eBay, if you can have clear pictures of what you are selling. You’ll get a lot of exposure that way, and can grow your business from there.
Mark asks…
What taxes do i pay on my online business?
I am in the process of setting up an online business. My business is forum based and isn’t selling any products yet? However, i do plan to make some money via advertising (as everyone does). Firstly from google adsense and then hopefully from private advertisers. I am a 15 year old and i live in the UK (Nottingham).
I wondered wat taxes i need to pay if any, and if so, how or where do i sign up to pay them?
Also, do i register my business name the same as a normal business does?
Jere answers:
Three useful websites with masses of relevant info for new businesses:
www.businesslink.gov.uk
http://www.hmrc.gov.uk/selfemployed/tmastarting-up-in-business.shtml
http://www.startupbritain.org/
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