Taxation on website revenue...

Well you finally made it, you are making money on the internet. Or at least the money is in your sights. It all seems like gravy when the checks start rolling in, but do not forget what it is; income, and it is taxable. I can only speak of the tax system in the United States, but earnings you generate on the internet is treated just like the money you make on your job. If you are in the 28% federal tax bracket on your job, you then owe 28% of money you make on the internet to Uncle Sam. What is worse, is that since you are self employed to generate this revenue, you owe an additional 14% self proprietor tax for a total of 42% or nearly half!

Also keep in mind that since the internet is electronic, so all your revenue is traced, tracked and reported. So avoid any future grief bykeeping good records and don't spend all your profits. You could even incorporate to save the 14% self proprietor tax, but you will then have to file quarterly reports, pay tax quarterly and probably pay an accountant. In my experience, the advantage to incorporate will pay off around $50,000 annual income.

The bright side, if you are making money on the internet, you require a computer to do so, so your computer is tax deductible. So is your printer, paper, pens, internet access, external hard drive, accessories and web hosting costs. So again I stress to keep good records. Get what you need to run your business comfortably and concentrate on the positive.