Making money online is a great way to earn an income or just a few extra bucks for your pocket. Many people are turning to the Internet as a way to make a living in our current economy. There are, though, things that every at home worker needs to be aware of in order to keep things above board, and to keep the IRS from knocking on your door. Here are ways to make money online and stay legal:

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Top 5 Things You Need To Know To Make Money Online And Stay Legal

Income Taxes

If you look at your traditional paycheck stub, you’ll see that federal, state and local taxes are taken out for you. There’s no need to do the calculations, it’s money you never even see. However, when you are working online as an independent contractor, you are in full control of both your income and your taxes. The thought of setting aside money for taxes can be daunting for many. How much do you take out, how much do you keep? The general rule of thumb is to set aside at least ten percent of every payment you receive as an independent contractor. If you have any other questions, you can access a credentialed income tax preparer online with TurboTax Live, and right from your very own home in Dallas, Los Angeles, Nashville, or anywhere else in the United States.

Self-Employment Tax

As an independent contractor, you are considered to be self-employed. With that dubious distinction comes self-employment tax. This tax must be paid in addition to your income tax; unfortunately. As an independent contractor, you should receive a 1099 form from every company you work for or, if you are working for yourself, you will need to fill out your own 1099. Typically, a 1099 is not required unless you make $400 or more per year.

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Because you are working from home, anything required for your job is tax deductible. If you are required to use your phone for work or had to buy a new laptop to blog, you can deduct these purchases. If you’ve got a killer deal that has to be hashed out over lunch, you can deduct your lunch expenses. This is an advantage for at home workers, but be sure to keep your receipts. Never count on the IRS to take you at your word; should you be audited, you’ll need to account for every line you’ve filled out on your federal filings.

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What exactly is income? This question can be confusing for many people new to the work at home scene. In general, money is considered income when it is given for services rendered or products supplied. For instance, if you make and sell cupcakes from your kitchen, every bit of money you charge for your cupcakes is considered income. If you are paid by companies to post ads on your blog, the money they pay you is considered income.

Copyright Laws

For bloggers, knowing the ins and outs of copyright laws is very important. If someone has posted an article online and you use it for inspiration, make sure you do only that and avoid the temptation to plagiarize. Plagiarizing in the world of blogging and content writing is considered illegal when the article you are mimicking has been copy-written.

Making money online is legal and, typically, very easy. You simply need to know where to look to find work, and you must make yourself aware of the laws centered around working from home. If you are ever in doubt, the IRS website is a great source of information