7 Ways To Avoid A Huge Tax Burden As An Internet Marketer (Pt 2)

If you missed the first part of this article check it out first. Otherwise it’s like walking in to the middle of a great movie.
#4 Consider An HSA Plan

Another way to cut down you tax burden is to look into setting up a Health Savings Account, also known as an HSA Plan.  An HSA is a savings account that works in conjunction with a high deductible health insurance plan.

For example, if you have a $5000 high deductible health insurance plan you will likely also qualify for an HSA account that will allow you to tax deduct anything that is considered health related.

For example, this could cover anything from a doctor’s visit, buying prescription medication, to a box of band aids.  That’s right, any money that comes out of that account can be tax deducted from your total income at the end of the year to lower your tax burden.  On top of that when you hit you plan deductible the insurance will usually cover 100% of the expenses.

However there is a downside to these plans you also have to consider as well.  With almost all HSA plans they will typically not include any drug prescription plan or doctors copay plan, which means you, will have to cover those costs out of pocket until your deductible has been met.

In the end this kind of plan isn’t for everyone especially if you are a part time internet marketer and have a health insurance plan through your current place of work.  However, I thought I would mention this option especially since I plan to go more full time as an internet marketer and having a plan like this could prove to be very beneficial as a tax strategy.

#5 Attend Industry Conferences

The next thing you can do to cut down your tax burden as an internet marketer is to attend industry conferences, and the great thing about this is that there are a ton of them to choose from, such as Affiliate Summit, Affcon, Pubcon, to the Blog World Expo. I could go on and on with this list but you get the picture.

Now you might be wondering why going to one these conferences would be beneficial to you.  So first off, I’m going to cover a few reasons why going is so important.

• One, you get to meet top earners in the industry and learn the new tips and tricks.
• Two, it allow you to meet new merchants that you could possible work with to help you improve sales and conversion rates.
• Three, events like these allow to also take a few extra days of R&R.  In fact, I usually like to fly in a few days early before the conference just to do a little site seeing.
• Finally, it gets you motivated and excited.  This I find to be the most valuable reason for going to a conference like this because being an internet marketer can be kind of a lonely business from time to time and these events make a great way to talk to likeminded people.

Now that we know there is a huge benefit to going to conferences let’s consider the tax deductions a trip like this could give you.  So for example, one of the conferences I plan to attend in the near future is the Affiliate Summit West In Las Vegas. So first off we can deduct several things, the conference ticket which runs around $879, the airline ticket which runs around $364, the hotel which runs around $450, and finally you can also deduct the food you eat.  In the end I usually spend around $2000 to attend an industry conference like this and I can deduct every penny of it from my taxes.

#6 Deduct A Portion Of Your Home

Moving on the sixth way you can go about lowering your tax burden is by actually deducting a portion of your home, known as the home office deduction.  In fact I recently learned about this tax deduction through me accountant.

What this deduction allows you to do is actually deduct a portion of your homes square footage off of your taxes, however in order to qualify for this you must meet two qualifications.

• Regular and Exclusive Use.  First off, in order to deduct a certain part of your home off of your taxes it must only be used for your business and nothing else.  The best way to do this is to have a spare room set up specifically as your home office and that’s it.
• Primary Place of Business.  Finally, the office you have in your home must be your primary office, so if you have an office somewhere else you will typically not be allowed to take part in this deduction.

Now to determine how much of your home is deductible simply measure the total square footage of your office and subtract it from the total square footage of your home.  For example, if you homes total square footage is 2000 sq. ft. and your home office measures 144 sq. ft. you would only have to pay taxes on 1856 sq. ft. and not the full 2000 sq. ft. Not a bad deal when you think about it.

#7 Deduct Your Basic Business Needs

Finally, the last thing you need to consider is you basic office essentials.  This can range from a bunch of different things you need to make your office work from a day to day basis so here are a few things to consider.

• Internet.  As an internet marketer you will need an internet connection and depending on the amount of time you use it for business purposes you may be able to get a majority of it deducted from your taxes.
• Cell Phone.  No business is complete without a phone and if your cell phone is your primary method of contact other than email you may be able to deduct this as well.  In fact I’ve usually been able to deduct somewhere between 35% to 50% of my cell phone bill.
• Office Supplies.  Finally, you can deduct office supplies such as paper, printer ink, and even a new laptop, or a new webcam.  Just make sure there is a necessary use for it.

Final Thoughts…

There you have it, the 7 ways to avoid a huge tax burden as an Internet marketer.  When it comes down to it if you really consider all the options I’ve presented in this article and you should have no problem increasing your tax deductions and decreasing over the coming year.  Also I know there may be other tax deduction options available so feel free to share them in the comments below.

This article was written by Chris Holdheide a personal finance blogger who writes for Stumble Forward.com, a blog about helping people avoid financial mistakes, improve their finances, and build wealth.