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Tuesday, October 9, 2012

Get Exempted From Paying Income Taxes or Sales Taxes For Your Home-Based Business, Is it Possible?

Not very long time ago, garage sales and flea markets were the most popular venues for selling pre-owned or used items that you would want to get rid of and at the same time earn money from. However, thanks to the advanced technological developments that have happened through recent years, we can now have easy access to the Internet and have options to develop our own home-based business by selling our stuffs online there.

Say if you have been selling your stuffs on internet or have future plans to make money online, you might need to consider tax issues with your online home-based business before you continue with it.

Selling on eBay or From Your Own Website

Many people today are getting attracted by the fact that they can actually sell almost anything on the internet by just posting it on eBay, their own websites or any other sites that offer practically similar services.
What most people do not know, however, is that there are actually rules and laws that cover selling items on the Internet. They should particularly study more about taxation rules and laws that can affect their home-based businesses dramatically.

Getting Serious In Your Online Home-Based Business

In case if you have been selling your stuffs for quite a long time already, you may consider it as an income-generating activity, correct? Having an online home-based business really has a lot of perks and advantages such as being able to work right at home comfortably, not having to have your own boss or supervisor etc.
What you have to realize is, however, that having an online home-based business does not mean that you are free from paying your taxes. When you decide to be more serious about earning money from your online home-based business, there are lots of things relating to income taxes or sales taxes that you have to consider carefully.

Maybe the first and most important thing to consider is about the legality of your online home-based business. Make sure that you are not breaking any taxation rule or law so that your reputation will not be in jeopardy.

In particular, you must be aware of several specific laws that come along with online home-based businesses such as rules about income or sales taxes.

As a real business owner, you also have to be aware of different taxation conditions of different states and countries because once you are having a real home-based business online, people from different parts of the world will more or less become your customers or potential business partners.

In addition, you must be aware of the right procedure to pay federal and state taxes for online home-based businesses. A few FAQs (Frequent-Asked-Questions) or common questions are:

"Am I free from paying income taxes or sales taxes", "I am running only a home-based business, is it possible to get exempted from paying income taxes or sales taxes?", "How do I begin to pay federal and state taxes?", "Do I need a tax ID number?", "Will I need to file any specific paper works or form sheets?", etc.

The most fundamental things you need to know about having a legal income-generating online home-based business is that your business is actually the one that will pay income taxes in pretty much the same way it would if it were a brick-and-mortar kin of business.

Furthermore, physical address for filing your income taxes should be the principal home-based business address of your entity. Laws of particular states that you transact or have business with are the ones that would determine whether you will be required to pay state income taxes.

Finally, you should also be aware that lots of states impose sales taxes on items that are purchased by residents of their state. Just one basic principle: making more sales, then paying for more sales taxes. Of course, different states have different sales taxation rates to pay for. If you do not want to get into troubles with your income-generating online home-based business or end up getting dazed and confused with those many sales taxation laws and condition, we strongly suggest that you should consult a lawyer knowledgeable in these tax-related matters.

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