Tuesday, February 28, 2006

Self-Employment, Taxes, and PayPal



For the first time, the year 2005 saw me have to deal with a significant amount of self-employment income. Of course, this meant I needed to learn about self-employment as it relates to everyone's favorite topic: Taxes.

The best resource I found, actually, was a book called Minding Her Own Business. (Go ahead and crack the jokes. I can handle it.)

At $10, that book is an absolute bargain. I recommend it highly. And one of these days, I'll get around to reviewing it.

Something that might be of interest to other bloggers, too, is the following article:

Bankrate.com:   "Can I Deduct PayPal expenses?"

One thing's for sure: The extra self-employment income is nice, but it sure complicates tax matters. By extension, it also makes for a fair amount of extra record-keeping. I'm sure glad for my (moderate) proficiency in Quicken and Excel!

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— Posted by Michael @ 12:24 PM








2 Comments:
 

Mike,
The SE taxes can start to take a big chunk of SE money from your pocket. If it makes economic sense (which it probably does), you may want to incorporate as an S-corporation. She probably mentioned that in her book though..

 

Update: I just learned that some states tax s-corps to a small degree. I guess they're only totally pass-through entities at the federal level.

Man, if they don't get it one way, they get it another.

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