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Author: trek5500 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121187  
Subject: WWW Sales Income Date: 9/5/2000 12:46 PM
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Posted this in the General Messages and was recommended here - Preface - Total newbie to investing, etc. I have had a pretty good year from a side internet gig and will be grossing probably over $10K from internet sales income. Since I am "Joe Middle Class" I am very concerned about this relatively big jump in income and want to make sure I do the right thing tax wise - 1] to minimize the tax hit and 2] to make sure I allocate enough money to cover the taxes. I am currently not set up as a business or anything like that - just an independent designer who finally seems to be getting it going! Thanks much for any thoughts...

PS - more than willing to read related articles, just haven't found the right one yet!
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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39584 of 121187
Subject: Re: WWW Sales Income Date: 9/5/2000 7:57 PM
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<<Posted this in the General Messages and was recommended here - Preface - Total newbie to investing, etc. I have had a pretty good year from a side internet gig and will be grossing probably over $10K from internet sales income. Since I am "Joe Middle Class" I am very concerned about this relatively big jump in income and want to make sure I do the right thing tax wise - 1] to minimize the tax hit and 2] to make sure I allocate enough money to cover the taxes. I am currently not set up as a business or anything like that - just an independent designer who finally seems to be getting it going! Thanks much for any thoughts...>>

I guess that my first thought would be to check out the articles in the Taxes FAQ area for some information that might be of interest to you...especially in the Pension Plan and IRA section of the FAQ.

Second, since you are new to taxes, you might want to pick up the TMF Investment Tax Guide 2000. It'll give you a basic understanding of how taxes work, how they are computed, and the information to help you with your own computeing and estimating. Plus, there are a number of tips that will be of interest to you. You can order a copy of the Tax Guide from FoolMart.

Finally, your required reading should be IRS Publications 334 and 560 at the IRS web site. That'll give you some information on how small business works, some of the deductions that you might want to be aware of, and the options relative to self employed retirement plans.

You've got a LOT of reading to do to get up to speed. Your only other alternative would be to engage the services of a qualified tax pro to review your situation and make some suggestions. But even if you DO go the route of the tax pro, the more YOU know about the issues, the better questions you can ask. After all, it IS your money.

TMF Taxes
Roy




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Author: criser Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39594 of 121187
Subject: Re: WWW Sales Income Date: 9/6/2000 12:06 AM
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I heartily second Roy's suggestion to get yourself a copy of TMF Tax Guide 2000. It's the best and most concise consumer-oriented tax guide out there. It will get you started, then you can get answers to the things the Guide doesn't answer either from other tax guides or from a pro.

Get educated first to the point that you know what's going on in a general kind of way, then see an accountant and attorney BEFORE you do anything like form a business entity like a corporation or LLC, which if you want to do it right, is, as I like to repeat like a broken record, not a do-it-yourself proposition, despite the Nolo books, etc.

If you can understand and interpret every provision in the corporate bylaws form or LLC operating agreement form, and you know the asset protection and tax consequences of each, then go for it. But my guess is that most people can't do that just like I couldn't do the head gasket replacement on my truck this past winter. I paid someone who knew what he was doing to do it for me and you should pay someone to help you form your business, draft the necessary documents (not just bylaws or operating agreement but also to help you with standard contracts if you're doing contract work), and to help you keep things on a smooth and steady course.

Getting off my soapbox now...

Oh, and congratulations on the new business - it's a blast to be in business for yourself and not The Man, eh!?!

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