Online Business Tax Laws
Help for Taxes for Online Business Owners
Taxes for online business owners are fraught with confusing terms and yearly changes. It can be hard for a small business owner to keep abreast of all the new tax laws and changes. However, there are resources to help you stay ahead of the game and keep your taxes straight.
Business Dot Gov Teams Up with the IRS
The IRS understands starting a new business can be quite overwhelming. Therefore, they have teamed up with business dot gov to help small business owners get started.
Under the Tax Resources section, you will find:
- IRS Video Portal – The IRS Video Portal is full of helpful audio and video presentations targeted towards small business owners, individuals and tax professionals. This section has hundreds of videos to answer all your questions about taxes, documents and refunds.
- Small Business and Self-Employed One-Stop – This section has everything a small business owner needs to grow. You can subscribe to a newsletter, sign up for workshops, download forms, and much more.
- Starting a Business and Keeping Records – Here you will find explanations for all your basic federal tax and recordkeeping needs. It is a pdf document, so give it time to load completely.
Taxes on Affiliates
As a business owner, you can deduct the amount paid to affiliates. This is considered a normal business expense. However, you will need to send in a 1099-MISC to both the affiliate and to the IRS for any affiliate making $600 or more. This form work in cooperation with the W9.
Parts of a W9
A W9 is a certification that the tax ID number given is accurate. All small businesses dealing with affiliates or other independent contractors need to have a W9 for each affiliate. The document must be signed. Since the IRS accepts a digital signature, the document can be signed online.
Line 1: Name (The name of the person)
Line 2: Business Name (If the name is different from the person)
Line 3: Type of business (The individual checks whether it is a sole proprietorship, corporation, partnership, LLC , or something else)
Line 4 & 5: Address
Part 1: Taxpayer Identification Number (TIN) – The taxpayer either enters their social security number or employer identification number (EIN)
Part 2: Certification – This is the portion where the taxpayer signs the document. In doing so, the taxpayer is certifying the information is correct.
When to collect a W9
Technically, you can collect a W9 at any time. However, it is highly recommended to get the W9 as soon as possible. In fact, it is recommended to have the affiliate fill out the form before paying them anything.
While you technically only need the W9 for affiliates making $600 or more, it is a safe practice to get the information long before they reach that amount. In essence, it is better safe than sorry. With the appropriate software, tracking this information on all your affiliates takes only a few moments but can save you thousands in taxes later on.
About the Author
Would you like have a service for your online business that tracks all W9 and 1099 information for your tax records on files? To try this free service for online business owners that requires payees to fill out a tax profile, visit https://paypeopleonline.com/ to keep your business away from tax nightmares and raising flags with the IRS.
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