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How I Do My Taxes As An Online Business Owner & Content Creator (E-commerce, Dropshipping, etc.)

Published on: December 4 2022 by Baddie In Business

How I Do My Taxes As An Online Business Owner & Content Creator (E-commerce, Dropshipping, etc.)

The above is a brief introduction to How I Do My Taxes As An Online Business Owner & Content Creator (E-commerce, Dropshipping, etc.).

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How I Do My Taxes As An Online Business Owner & Content Creator (E-commerce, Dropshipping, etc.)

startTime durationTime text
00:00:00 00:00:04 hey buddy and business family my name is
00:00:01 00:00:06 isabella i am the owner of two six
00:00:04 00:00:07 figure earning online businesses and
00:00:06 00:00:10 today i'm gonna be toking about the
00:00:07 00:00:13 subject that you guys have been dying to
00:00:10 00:00:15 know about which is how i do my taxes as
00:00:13 00:00:18 an online business slash
00:00:15 00:00:20 online if you guys are new to my channel
00:00:18 00:00:22 you guys know i give you guys so many
00:00:20 00:00:25 ideas and i even show you guys step by
00:00:22 00:00:27 step how to start making money online
00:00:25 00:00:31 but i realized that a lot of you guys
00:00:27 00:00:33 had so many questions about the tax side
00:00:31 00:00:35 of making money online i think a huge
00:00:33 00:00:37 reason of why people don't want to start
00:00:35 00:00:38 their online business or a huge barrier
00:00:37 00:00:41 that holds people back from starting
00:00:38 00:00:43 their business is the subject of taxes
00:00:41 00:00:45 and people being afraid that once they
00:00:43 00:00:47 get the money they're not gonna know
00:00:45 00:00:49 what they have to do next so hopefully
00:00:47 00:00:52 this video will clear a lot of these
00:00:49 00:00:53 concerns up for you so you can follow
00:00:52 00:00:55 your dreams and start that business that
00:00:53 00:00:57 you've always wanted to start before we
00:00:55 00:00:59 get into this video make sure you guys
00:00:57 00:01:01 smash that like button for the youtube
00:00:59 00:01:03 algorithm and hit that subscribe button
00:01:01 00:01:04 so i can continue to make videos just
00:01:03 00:01:06 like this for you guys
00:01:04 00:01:10 now this video is not meant to be
00:01:06 00:01:12 instructional as i am not a cpa i am not
00:01:10 00:01:15 legally allowed to give you any tax
00:01:12 00:01:18 advice and this video is not advice at
00:01:15 00:01:20 all although i wanted to share what i
00:01:18 00:01:24 personally do and that can hopefully
00:01:20 00:01:25 guide you guys so you will not be afraid
00:01:24 00:01:27 to start that online business that
00:01:25 00:01:29 you've always wanted to start or start
00:01:27 00:01:31 making money online if you are
00:01:29 00:01:33 unfamiliar with what i do online not
00:01:31 00:01:36 only do we make money from our videos
00:01:33 00:01:38 and content creation but we also make
00:01:36 00:01:41 money from our ecommerce stores so just
00:01:38 00:01:43 to give you guys a background and basis
00:01:41 00:01:45 of where i'm coming from i do live in
00:01:43 00:01:47 the united states i live in florida
00:01:45 00:01:50 something about florida is that we don't
00:01:47 00:01:52 pay state tax we only pay federal tax
00:01:50 00:01:54 state tax can be different depending on
00:01:52 00:01:56 your state every state is different and
00:01:54 00:01:59 these are the states that do not make
00:01:56 00:02:02 you pay state tax so i do save on taxes
00:01:59 00:02:05 yearly because i only am responsible for
00:02:02 00:02:07 paying the federal tax now first of all
00:02:05 00:02:10 let me just say this
00:02:07 00:02:14 you can make money online without having
00:02:10 00:02:16 like any sort of license or registration
00:02:14 00:02:18 or whatever you'd like to call it let's
00:02:16 00:02:20 just say you just got invited into the
00:02:18 00:02:22 reals bonus program on facebook and
00:02:20 00:02:24 before you start accepting payments from
00:02:22 00:02:25 facebook you have to fill out this type
00:02:24 00:02:26 of form
00:02:25 00:02:28 so don't let this kind of thing
00:02:26 00:02:32 intimidate you whenever you make money
00:02:28 00:02:34 online 90 of the time they're going to
00:02:32 00:02:36 have you fill out a form so this is what
00:02:34 00:02:38 that looks like some social media sites
00:02:36 00:02:39 will allow you to fill this out
00:02:38 00:02:41 electronically some will have you
00:02:39 00:02:43 actually upload this and you can get a
00:02:41 00:02:45 blank one from the irs website directly
00:02:43 00:02:47 it's obviously an example but this is
00:02:45 00:02:48 what i always select when i'm filling
00:02:47 00:02:51 these out typically what you're going to
00:02:48 00:02:53 put for this is sole proprietorship this
00:02:51 00:02:55 is if you were to get paid for your
00:02:53 00:02:58 videos via facebook or instagram for
00:02:55 00:03:00 example so as a sole proprietorship and
00:02:58 00:03:02 when you are a sole proprietorship like
00:03:00 00:03:04 you don't have to get anything of my
00:03:02 00:03:06 knowledge you don't have to get anything
00:03:04 00:03:08 to become a sole proprietorship you are
00:03:06 00:03:11 a sole proprietorship because the
00:03:08 00:03:13 definition of sole proprietorship is a
00:03:11 00:03:17 single person running that business i
00:03:13 00:03:19 personally did not get my llc until i
00:03:17 00:03:22 was already making consistent money and
00:03:19 00:03:24 knew i wanted to keep the business long
00:03:22 00:03:26 term i didn't want to legalize anything
00:03:24 00:03:28 just because i wasn't even sure if i was
00:03:26 00:03:30 even gonna make money in the beginning
00:03:28 00:03:32 and once you get an llc it is a
00:03:30 00:03:35 commitment because you do have to pay
00:03:32 00:03:36 yearly for the llc and there's other
00:03:35 00:03:38 responsibilities that come along with
00:03:36 00:03:40 that so that's another thing that for me
00:03:38 00:03:42 personally if i were to start from
00:03:40 00:03:43 scratch i would still do that i would
00:03:42 00:03:47 wait till i start making consistent
00:03:43 00:03:48 money and then get my llc now obviously
00:03:47 00:03:51 a sole proprietor means that you would
00:03:48 00:03:54 be liable this is why an llc is
00:03:51 00:03:57 important that is why i now have an llc
00:03:54 00:04:00 because the loc makes your business
00:03:57 00:04:02 limited to just your business so in the
00:04:00 00:04:04 case that you would get sued they can't
00:04:02 00:04:06 come after you or your personal assets
00:04:04 00:04:08 this is just how i think of it again you
00:04:06 00:04:10 guys nothing in this video is legal
00:04:08 00:04:12 advice so take everything that i say
00:04:10 00:04:15 with a grain of salt i'm just sharing my
00:04:12 00:04:18 personal view and what i have done so
00:04:15 00:04:19 even if you do identify as a sole
00:04:18 00:04:22 proprietor and say you want to start
00:04:19 00:04:24 your business as a sole proprietor which
00:04:22 00:04:25 is tiknically allowed like through big
00:04:24 00:04:27 cartel like for example when you're
00:04:25 00:04:29 signing up for your payment options
00:04:27 00:04:31 through big cartel which is paypal and
00:04:29 00:04:32 stripe big cartel is the free website
00:04:31 00:04:34 host that i recommend on my channel all
00:04:32 00:04:36 the time if you want to go and check
00:04:34 00:04:40 that video out but those payment options
00:04:36 00:04:43 allow you to use sole proprietorship in
00:04:40 00:04:45 order to start collecting payments what
00:04:43 00:04:48 that means is at the end of the year you
00:04:45 00:04:50 are going to receive 1099 forms and this
00:04:48 00:04:53 is for any money that you make online
00:04:50 00:04:56 10.99 forms is pretty much what i have
00:04:53 00:04:58 always received from my payment
00:04:56 00:05:00 processors that i use for example
00:04:58 00:05:02 facebook pays us for reals they send us
00:05:00 00:05:05 a 1099 form at the end of the year so
00:05:02 00:05:07 the 1099 form shows the money that we
00:05:05 00:05:09 have made in total but this is the
00:05:07 00:05:11 beautiful thing about being a business
00:05:09 00:05:13 owner or functioning as a sole
00:05:11 00:05:16 proprietorship is that you can do
00:05:13 00:05:18 write-offs so even though
00:05:16 00:05:20 they are sending you a 1099 form showing
00:05:18 00:05:23 you how much you made in total you're
00:05:20 00:05:25 gonna take that 1099 form you can upload
00:05:23 00:05:26 it i've used turbotax in the in the past
00:05:25 00:05:29 and like other websites like that
00:05:26 00:05:31 they've helped me um like basically just
00:05:29 00:05:33 walk you through doing taxes if you're
00:05:31 00:05:34 making like a smaller amount and you're
00:05:33 00:05:36 not using an accountant yet i've used
00:05:34 00:05:37 those systems and they worked pretty
00:05:36 00:05:40 well for me
00:05:37 00:05:41 those systems will walk you through your
00:05:40 00:05:43 write-offs and like if you work for an
00:05:41 00:05:46 accountant for example
00:05:43 00:05:48 that accountant is gonna also give you a
00:05:46 00:05:50 worksheet stating all of the things that
00:05:48 00:05:52 you can write off now this is another
00:05:50 00:05:54 reason why it's really important to keep
00:05:52 00:05:55 everything on a credit card or debit
00:05:54 00:05:58 card somewhere recorded like never buy
00:05:55 00:05:59 stuff in cash or through paypal account
00:05:58 00:06:01 because you want to make sure you're
00:05:59 00:06:03 recording everything that you're
00:06:01 00:06:05 spending money on just so you're able to
00:06:03 00:06:08 track that in order to do these
00:06:05 00:06:11 write-offs there are so many pages of
00:06:08 00:06:14 the irs tax code and that is why it's so
00:06:11 00:06:16 important to hire a cpa
00:06:14 00:06:19 accountant that knows online business to
00:06:16 00:06:21 do your taxes i personally did not hire
00:06:19 00:06:23 an accountant until i was already making
00:06:21 00:06:25 over a hundred thousand dollars online
00:06:23 00:06:28 to ensure that i was doing my taxes
00:06:25 00:06:30 correctly i personally did not know
00:06:28 00:06:32 anybody in my circle that had an online
00:06:30 00:06:34 business and i basically just googled
00:06:32 00:06:36 accountants in my area so that's highly
00:06:34 00:06:38 what i would recommend for you too
00:06:36 00:06:40 um because every state is different
00:06:38 00:06:42 every country is different so just
00:06:40 00:06:43 google accountants near me and i
00:06:42 00:06:45 guarantee you
00:06:43 00:06:46 one will come up that it is an
00:06:45 00:06:48 accountant that is experienced in
00:06:46 00:06:51 business because there's actually a lot
00:06:48 00:06:53 of accountants that they are not
00:06:51 00:06:56 actually cpas so they don't really have
00:06:53 00:06:57 experience with businesses so that's
00:06:56 00:06:58 just one thing to keep in mind i'm going
00:06:57 00:07:00 to share something with you guys that
00:06:58 00:07:02 this is probably the reason why i'm
00:07:00 00:07:04 committed to being an online business
00:07:02 00:07:08 owner for the rest of my life and being
00:07:04 00:07:09 my own boss for this reason alone say
00:07:08 00:07:11 you become a doctor
00:07:09 00:07:15 and you're working for a hospital
00:07:11 00:07:16 say you make 300 000 a year so we have a
00:07:15 00:07:18 doctor that made three hundred thousand
00:07:16 00:07:20 a year and then we have a business owner
00:07:18 00:07:22 that made three hundred thousand a year
00:07:20 00:07:25 so that doctor because they're employed
00:07:22 00:07:27 and working for a hospital they have to
00:07:25 00:07:30 pay a hundred thousand dollars in taxes
00:07:27 00:07:32 because their tax bracket was in the tax
00:07:30 00:07:34 bracket to where they have to pay a
00:07:32 00:07:36 certain percentage for the money that
00:07:34 00:07:38 they made they cannot dispute that they
00:07:36 00:07:40 cannot do write-offs because they're an
00:07:38 00:07:42 employee even though they're a doctor if
00:07:40 00:07:44 they don't have their own practike if
00:07:42 00:07:46 they're under somebody else they cannot
00:07:44 00:07:47 do write-offs on the other hand a
00:07:46 00:07:49 business owner can do multiple
00:07:47 00:07:52 write-offs so say that business owner on
00:07:49 00:07:55 paper it shows 300 000 but they're able
00:07:52 00:07:57 to do write-offs to reduce their income
00:07:55 00:08:00 so they pay taxes on whatever their
00:07:57 00:08:02 actual income was for the year and the
00:08:00 00:08:05 amount of things that you can write off
00:08:02 00:08:07 your taxes is actually insane let's go
00:08:05 00:08:10 through a bunch right now so here are
00:08:07 00:08:12 examples of tax write-offs so whatever
00:08:10 00:08:14 pertains to your business
00:08:12 00:08:17 is what you were able to write off for
00:08:14 00:08:19 example for the business meals section
00:08:17 00:08:21 as long as you are going out to eat and
00:08:19 00:08:23 you're having business meetings or
00:08:21 00:08:26 you're going out to eat and toking
00:08:23 00:08:28 about your business this can be a huge
00:08:26 00:08:29 write-off off your taxes throughout the
00:08:28 00:08:31 year
00:08:29 00:08:33 and for this section the travel expenses
00:08:31 00:08:36 i am able to write traveling off my
00:08:33 00:08:38 taxes because whenever i travel that is
00:08:36 00:08:41 able to improve my content which then
00:08:38 00:08:44 improves my business so this is able to
00:08:41 00:08:47 be another write-off so let's tok about
00:08:44 00:08:50 tax brackets this is how i learned and
00:08:47 00:08:53 understood how taxes work and how you
00:08:50 00:08:55 pay taxes this graph is what made me
00:08:53 00:08:58 finally understand the percentage of how
00:08:55 00:09:00 much i have to pay in taxes so for an
00:08:58 00:09:03 example if you are single and you made
00:09:00 00:09:07 two hundred thousand dollars in one year
00:09:03 00:09:10 you would owe 32 percent in taxes the
00:09:07 00:09:13 key word here is how much money you made
00:09:10 00:09:16 also known as your net income not your
00:09:13 00:09:18 gross income your gross income is what's
00:09:16 00:09:20 on those 1099 forms that they send you
00:09:18 00:09:24 your net income is the income that you
00:09:20 00:09:27 made after you do your write-offs so the
00:09:24 00:09:30 lower your net income is the lower
00:09:27 00:09:32 percentage of tax bracket that you're
00:09:30 00:09:34 going to get into so that's always the
00:09:32 00:09:37 goal when i do my taxes is to get in a
00:09:34 00:09:40 lower tax bracket to prevent me from
00:09:37 00:09:42 having to come out of pocket with paying
00:09:40 00:09:44 more in taxes
00:09:42 00:09:46 again if you are letting the thought of
00:09:44 00:09:48 taxes scare you away from starting a
00:09:46 00:09:49 business if you don't make money you're
00:09:48 00:09:52 not going to have to pay any taxes
00:09:49 00:09:53 anyways so start making the money first
00:09:52 00:09:56 that's the biggest challenge is making
00:09:53 00:09:57 the money once you have you know watched
00:09:56 00:10:00 my youtube videos tried it yourself and
00:09:57 00:10:01 started making money that's when you can
00:10:00 00:10:03 start thinking about how you're going to
00:10:01 00:10:05 manage that money and build your
00:10:03 00:10:07 foundation
00:10:05 00:10:08 to pay your taxes properly and things
00:10:07 00:10:11 like that
00:10:08 00:10:14 as an online business owner creator you
00:10:11 00:10:16 just have so many benefits to so many
00:10:14 00:10:19 things that as an employee you will
00:10:16 00:10:21 never have i think a big reason of this
00:10:19 00:10:24 because the wealthy people want to stay
00:10:21 00:10:26 wealthy so a lot of these rules i feel
00:10:24 00:10:27 like are created to keep those people
00:10:26 00:10:30 wealthy so we have to work smart and
00:10:27 00:10:33 hard to beat in that one percent and to
00:10:30 00:10:34 be able to think like the wealthy people
00:10:33 00:10:37 of this world
00:10:34 00:10:39 the biggest takeaway here is just get
00:10:37 00:10:41 started you're not gonna pay any taxes
00:10:39 00:10:43 if you don't make any money so really
00:10:41 00:10:45 you're only hurting yourself by not
00:10:43 00:10:47 actually getting started but i
00:10:45 00:10:50 definitely feel like i paid more taxes
00:10:47 00:10:52 as an employee than i ever did as a
00:10:50 00:10:54 business owner only because as an
00:10:52 00:10:56 employee you cannot dispute how much you
00:10:54 00:10:58 make and in a lot of situations people
00:10:56 00:11:00 that are climbing the corporate ladder
00:10:58 00:11:02 certain people in the corporate world
00:11:00 00:11:04 cannot get a raise because if they get a
00:11:02 00:11:06 raise they'll have to pay more in taxes
00:11:04 00:11:08 which really just decreases their actual
00:11:06 00:11:10 income and as a business owner we are
00:11:08 00:11:12 able to reduce our taxable income with
00:11:10 00:11:14 certain write-offs that we do throughout
00:11:12 00:11:16 the year that's why i feel like being an
00:11:14 00:11:19 online business owner creator is like a
00:11:16 00:11:20 huge life hack another thing that
00:11:19 00:11:22 actually scared me when i first started
00:11:20 00:11:24 was someone said that you have to pay
00:11:22 00:11:26 taxes quarterly i actually asked my
00:11:24 00:11:29 accountant about this and my accountant
00:11:26 00:11:32 told me that i am allowed to pay once a
00:11:29 00:11:34 year so i personally keep money aside i
00:11:32 00:11:36 always keep a certain amount of money
00:11:34 00:11:38 reserved for taxes
00:11:36 00:11:39 so i know that whatever tax bill i have
00:11:38 00:11:41 coming at the end of the year i can
00:11:39 00:11:42 already guestimate what that tax bill
00:11:41 00:11:44 will be
00:11:42 00:11:46 but if you want to pay quarterly and
00:11:44 00:11:48 that would work better for you just
00:11:46 00:11:51 consult with an accountant at that point
00:11:48 00:11:52 and they can help you with that further
00:11:51 00:11:54 but i personally did not use an
00:11:52 00:11:56 accountant until i was already making
00:11:54 00:11:58 over a hundred thousand dollars a year
00:11:56 00:12:00 from my online hustles
00:11:58 00:12:02 thank you guys so much for watching and
00:12:00 00:12:04 i hope this video helped you understand
00:12:02 00:12:06 online business and creator taxes of
00:12:04 00:12:08 course if you guys have any questions
00:12:06 00:12:10 comment down below we can probably help
00:12:08 00:12:11 all of each other out because i
00:12:10 00:12:12 guarantee you if you have a question
00:12:11 00:12:14 someone probably has the same question
00:12:12 00:12:17 and i'll try to respond to all of the
00:12:14 00:12:18 comments and questions down below i wish
00:12:17 00:12:20 you guys all the best with your online
00:12:18 00:12:22 business ventures and i will see you
00:12:20 00:12:25 guys in my next youtube video bye
00:12:22 00:12:25 everyone
00:12:39 00:12:41 you

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