Not sure which country you're in... but in the U.S. any income you make as an Independent Contractor is subject to tax. I would suggest reading the following from our chums at the I.R.S.:
thanx that helped a little, but still does not answer the question of web based services.
It really shouldn't matter... you will still likely owe taxes on that income.
You're best bet is to schedule a meeting with a CPA ... it's usually free for the initial consultation, and they're likely to give you much more sound advice.
Paying taxes is an area that you don't want to cut corners... trust me :)
Whatever you do become an s-corp. You WILL pay half as much tax at the end of the year. I learned that last year.
For real estate investing become an LLC.
Two big lessons I learned.
Just went through this myself.
In the US:
You make money, you pay your taxes. US, State and don't forget the local. Doesn't really matter how it was made - providing services, google adsense, consulting, etc.
Just my opinion and I am not a lawyer or CPA.
>Now I have heard from others that since webdesign is a labor, that there is no taxed hours
I think you are confusing sales taxes - which in most states are not collected on labor - with income taxes - which are collected on just about any income (I know there are exceptions, but professional services are not one of them).
I meant to say that those who told you your labor was exempt from taxation were confusing the collection of sales taxes with the levying of income taxes - not that you were confusing the two, which you obviously are not.
i have some query to ask and discuss about taxes/duties matter. i am in London UK and got watches supplier in Thailand. i have just started my business online at auction sites. any body has idea when does taxes apply on items? does VAT + duty apllies on quantity or price value?
For example- i have bought 10 designer watchs @ total 180£, should i expect duties and VAT on it, the quantities are 10 and total price value is 180£. ( approx 305$ US).
I hope, you will focus on my query.
|I think you are confusing sales taxes - which in most states are not collected on labor |
Make sure you double check this issue with your state's sales tax dept. Not all states treat this issue the same. I am in OH and here a web site created for the first time is considered a "tangible" product and hence subject to sales tax. However maintenance of an existing site is considered services and not subject to sales taxes.