Recordkeeping - E-Business & E-Commerce
Whether your business is online or offline, keeping good records can help you save money! Good records will help you monitor the progress of your business, prepare your financial statements, identify the sources of your receipts, keep track of deductible expenses, prepare your tax returns, and support items reported on your tax returns.
Recordkeeping
The above link will take you to an IRS article that discusses why to keep records, the types of records to keep, how long to keep records, employment tax records, recording transactions, and burden of proof.
Information Reporting
Internal Revenue Code Section 6050W requires payment settlement entities to perform information reporting on payment card and third-party network payment transactions starting in tax years after December 31, 2010. Starting in tax years after December 31, 2011, these payments will be subject to back-up withholding.
For online auction sellers this means that your credit card and e-payment sales will be reported annually to you and to the IRS that exceed the dollar and transactional threshold. However, your online auction sales that are less than these amounts generally are still taxable.
Filing a Schedule C for Your Online Business
This link takes you to an IRS video on Who Needs to File a Schedule C and How to do it. A transcript of the video is also available online.
References/Related Topics
-
The Virtual Small Business Tax Workshop page for instructional, interactive lessons designed to help new small business owners learn their tax rights and responsibilities.
