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Help For USA Tax Managing ????

by nikolaaa
7 replies
Hi Warriors,

For my business as a online entrepreneur and internet marketer I'm using ONLY PAYPAL as a method for earnings and business expenses.

How can I do my bookkeeping, what records I have to have as proofs for expenses.

Is it enough to have just Paypal records?

How need to look my paperworks, records...

How I can manage my USA TAX responsibility in this case that I'm working through PayPal only?

When I can find information for such a thing?

How are You doing that?

What are yours records?

What are you collecting?

Is there any of you who has experience in audit with IRS?

What type of documents are they looking for business expenses if you using ONLY PAYPAL?


Thanks,
Nikola
#managing #tax #usa
  • Profile picture of the author lburrell
    Im in the process of creating an ebook outlining what IM'ers can do to lower their tax burden. When i finish it, i'll let you know mate
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  • Profile picture of the author LB
    The best thing you can do is talk to an accountant.

    Your questions come up often here, and that's always the best answer.

    A good accountant won't cost you anything but will save you much.
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  • Profile picture of the author Renee Blue
    For the best Advice you should talk to a CPA or a Tax Lawyer. You should work with someone you like and ask for references.

    But IMHO, you are currently running your business as a sole proprietor and if it looks like someone has a good chance of suing you should get some insurance. You only really need to get a LLC or INC if you are going to be sued or for a tax strategy.

    If you are making a profit you need to pay quarterly withholdings. You should take 20% of net and save it for your quarterly tax bill. Your profits are taxed at your personal rate and you will need to pay Self Employment tax.

    The IRS does try to help the small business in its tax compliance. So go to the IRS website and start reading

    The cool thing about running your own business is that you pay taxes after you spend your profits. So if you buy IM products you most likely will be able to deduct them.
    You may also want to know the difference between tax avoidance and tax evasion.

    Don't forget your State taxes too.

    Your CPA can tell you what your document requirements are.
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    • Profile picture of the author Marty S
      It sounds like your business is rather simple, like most of us, but it pays to make an appointment with an accountant so he can qualify your normal, day-to-day transactions.

      You will need to know if incorporating would be beneficial, and if you need to pay some taxes right now on an installment basis. Leave the big-picture questions to him/her while meeting with him once or twice a year, and them bringing him the proper records for filing at the required time.

      If you have many transactions it would be wise to invest in Quicken or Simply Accounting. Do not hire an ACCOUNTANT to do this. Either do it yourself, or place an ad in Craigs List in your home town for a part time book-keeper to come in once a month and make all the entries. At this point you will get numerous applicants for a PT job.

      Yes, you will have to pay $12-$15 per hour hour, but with taxes and accounting, you want to get that taken care of, and have a responsible reporting system without headaches.

      My PT book-keeper set up Simply Accounting, comes in twice a month and catches up on everything and has also been an extra bonus for me in terms of some office organizational systems.

      Bottom line - Make the right calls, get 2 people involved and DELEGATE.
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      • Profile picture of the author nikolaaa
        In 2007 I done various things on the internet such as affiliate marketing, selling small softwares, websites, blogs, on-line books, etc

        I'm just doing this business as an individual.

        For my on-line activity in 2007 I have filed my Taxis as Small Business in schedule C(form 1040).
        And I give to IRS more then half what I really earned.

        But I steel worry do I know all rules for such a thing.

        All information that I have for my earnings as well as for the expenses are on PayPal history records.

        At the tax-time I just calculate "+" and "-" from Paypal History.

        Is it enough for IRS?


        All this informations about SMALL BUSINESS book keeping, paper records for expenses, accounting etc. are not quite applicable for that what I and so many people from this forum are doing.

        For example if I have paid $10 to some guy from India to write a article for me and I show this $10 as my expense, how I can have PAPER PROOF that it was really my expense?

        It is not just like you buy a ticket for your business trip and have paper bill from the bus station.

        And I have hundreds of expenses that are actually fees paid to individuals from over the world.

        To print all this e-mails like verbal agreements as a proof? No sense.

        Also It isn't possible to make records that are connected particular expenses to particular activities (earnings)
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        • Profile picture of the author Marty S
          Originally Posted by nikolaaa View Post

          All this informations about SMALL BUSINESS book keeping, paper records for expenses, accounting etc. are not quite applicable for that what I and so many people from this forum are doing.
          Whether small business or personal that is a delusional statement and one that is likely to land you boiling water some day.

          "Paper" is just a term, there is always a transaction record of some sort - email or records within PayPal.
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        • Profile picture of the author LB
          Originally Posted by nikolaaa View Post

          In 2007 I done various things on the internet such as affiliate marketing, selling small softwares, websites, blogs, on-line books, etc

          I'm just doing this business as an individual.

          For my on-line activity in 2007 I have filed my Taxis as Small Business in schedule C(form 1040).
          And I give to IRS more then half what I really earned.

          But I steel worry do I know all rules for such a thing.

          All information that I have for my earnings as well as for the expenses are on PayPal history records.

          At the tax-time I just calculate "+" and "-" from Paypal History.

          Is it enough for IRS?


          All this informations about SMALL BUSINESS book keeping, paper records for expenses, accounting etc. are not quite applicable for that what I and so many people from this forum are doing.

          For example if I have paid $10 to some guy from India to write a article for me and I show this $10 as my expense, how I can have PAPER PROOF that it was really my expense?

          It is not just like you buy a ticket for your business trip and have paper bill from the bus station.

          And I have hundreds of expenses that are actually fees paid to individuals from over the world.

          To print all this e-mails like verbal agreements as a proof? No sense.

          Also It isn't possible to make records that are connected particular expenses to particular activities (earnings)
          You've received good advice here but you are essentially asking your question again because you don't like the answer.

          Contact an accountant. It's really not that scary and it will put your mind at ease...I promise.

          They may even find deductions you missed from previous years that can end up in a refund for you.
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