Do I have to claim online income?

Most online income comes from self -employment. However, any online income that has taxes removed by the employer is considered an employee's position and W2 should be accepted. This type of income is filed together with regular income for 1040 annual income tax returns for the Internal Revenue Service (IRS). Any income of employees, which is more than $ 400 in the US (USD), must be required according to the 1040 C schedule. Anyone who earns more than $ 600 as an independent supplier from a particular source of online income should obtain 1099 forms in the post office that can be used to document income.

Many online auction shop owners ask if they have to make profits from their store as income. If it is a profit, it must be required. If the auctions are like sales in a garage where the money obtained was lower than the money was originally paid, it may not be required because the sale is actually a net loss. This is also a form where lindicate depreciation, which is deducts of business expenses against income. Many domestic workers think they can deduct some home expenses, such as internet and telephone accounts, but it is often not the case.

Payments for rent or mortgages can only be deducted in parts only if there is an office or distribution area that is used only for business. The rooms served by multipurpose cannot be deducted. Internet and telephone costs can only be deducted if these are reserved lines, while computers that are used for both business and personal purposes are also eligible.

There are cases where part of the home accounts can be deducted. If there is a reserved area, the deduction will be proportional to the size of the area compared to the size of the house. For example, if one room is six rooms of science to be deducted business, somewhere near 1/6 payments made in the householdI, including public services. It is also possible to deduct travel expenses such as gas, hotel and food for travel related only to the company.

There are many other expenditures that can be deducted from online reception. When selling on the auction website or other business websites, staff should deduct the cost of the item before sale and any shipping costs, so only the profit is calculated as income. Also, expenditure on printing materials, paper goods, wrapping materials and other necessary items in the office, as well as the costs of any website and fees paid to paying companies should be deducted.

If online income after all deductions exceeds $ 400, the worker is obliged to pay tax on self -employment. This tax includes social security and Medicare taxes that are removed from the salary of ordinary employees. With an ordinary employee, the employer and employee distributed the costs of these taxes. Those who are separatelyThe gainful work must be paid by both halves of this tax. In 2008, this rate was 15.3%, with 12.4% on social security and 2.9% to Medicare. Anyone who has questions about whether to submit a tax on C or self -employment tax should be certain with a professional accountant.