you should consider the legality Believing that you don't need to pay taxes with an online business is just one of the myths that are currently floating around. In fact you are going to discover that this is something that is believed by many people, when you work from home you do not pay taxes. One reason many men and women are becoming attracted to a business on the internet is because they think taxes are excluded. Needless to say there are some other things other than taxes that you're going to need to take care of for your business, including any type of licenses you may possibly need. For those of you who go through and do your research and discover everything you're going to have to do, it may well give you reservations about starting a web based business. Most people that are looking to start an internet business have not had any kind of experience in running their own business in the first place, which means they do not know what is involved. I am sure you realize that when people don't have any experience in running a business many of them will automatically believe whatever they hear, just like not having to pay taxes on an online business. Businesses on the internet, although they're run at home, are still required to pay taxes on the earnings they make. One of the most common reasons that individuals end up not paying taxes is simply because they honestly believe they do not have to pay taxes when they're running a business at home. One reason why plenty of people don't know much about taxes is mainly because their taxes are withheld by their employer automatically. One more thing you're going to need to keep in mind is the fact that no matter where your business is situated and whether or not it is in the real world or the online world, your taxes are derived from your income. So wherever you're located, online or offline, so long as you're making money with your internet business you're going to be required to pay taxes. Even if you're running your business totally by yourself, you still are a sole proprietor and must register your business, and also pay your taxes each year. Unfortunately, not everybody has the mentality to have the ability to run a business, particularly when they haven't worked other than for someone else, who was responsible for all of the tax stuff. Federal taxes have to be paid on your business, however they will be done differently when you're incorporated as opposed to being a sole proprietor. As a sole proprietor your income is reported with your personal tax return, and you're required to pay self employment tax, as well as medicare taxes. If you file as a corporation the tax structure will be different. Simply because there's a wide variety of ways that you are able to actually end up filing your corporate income tax it's going to be important for you to research or seek the advice of a professional. So as to make sure you are running your business legally, you ought to talk to a CPA or somebody else who is aware the tax laws. Keep in mind running an online business is going to require plenty of offline work, so make sure it's going to be worth it for you.