It's Not Fun, but It Has to be Done Benjamin Franklin wrote a 1789 letter that states, “But in this world nothing can be said to be certain, except death and taxes.” Even at the United States’ early beginnings, federal taxes were a necessary evil to fund various public projects and administrative costs. Today, federal taxes serve much of the same purpose. While virtually no one likes to prepare and file their taxes, it is a necessity if you want to avoid fines and further hassle. It is no secret that preparing and filing your taxes is notoriously complicated. Many people lament that it should not be so difficult to pay the government. However, some of the complications allow people to save money if they discover specific tax benefits. Knowing how to file your own taxes may be a good option if your tax situation is relatively straightforward, or if you are willing to learn the process. Why Do You Need to File Your Taxes Every Year? The short answer is that federal law requires that most individuals file taxes annually. Income taxes are assessed every year based on your income earned during that period. You then pay a percentage of that income to the government, less any deductions, adjustments, or credits that you qualify to receive. If you do not file (and pay) your taxes, then you may be assessed penalties and interest. The Internal Revenue Service (IRS) can even go as far as garnishing your wages and repossessing your property if you do not file and pay as required. The Benefits of Filing Your Own Taxes If you are one of the 43% of Americans that are doing your own taxes, you are certainly not alone. Roughly 53 million people prepared and filed their own taxes in 2018. There are many benefits to filing your own taxes, including: Saving money: Hiring a tax professional is expensive, and many people can prepare and file their returns on their own, completely free of charge. Control: Some people like knowing the exact information that is included in their return and being able to control the data, and for some, knowing precisely how the numbers work out, is comforting. Gain helpful information: When you prepare your taxes, you can see what items saved you money this year or which issues you should address so you can save money next year. While filing your own taxes is complicated, it can be beneficial under the right circumstances. There are several programs online that walk you through the process to help ensure you are taking advantage of all of your available deductions and credits. The Drawbacks of Filing Your Own Taxes In addition to the benefits, there are also some disadvantages to filing your own taxes. These include: Time and effort: Preparing and filing your taxes takes time and work You have to sift through financial information and deal with concepts that you may not understand well. The process can be frustrating and take a considerable amount of time. Error risk: If you do not completely understand how your taxes work, you run the risk of making a mistake because of misconceptions. If that happens, it could lead to underpayment and audits down the road. Questions: Even if you use a tax preparation software, you may still have questions that will remain unanswered unless you do significant research or reach out to a tax professional. For some people, the risk of having a substantial error that triggers the IRS’s attention is enough to scare them away from preparing their own taxes. Preparing for Filing Your Taxes When you begin work on your taxes, you should have information gathered throughout the year. Some of the most common items that you will need include: Social Security numbers for you, your spouse, and any dependents Information about wages, such as W2s or 1099s Investment income information Documents that represent any other source of income Information regarding adjustments to income, such as student loan interest paid, IRA contributions, and health savings account contributions, just to name a few Information regarding potential credits, including, for example, child care expenses, education expenses, or retirement savings contributions Data about any tax payments that you may have made throughout the year Keeping good records will help make tax preparation easier at the beginning of the year. [youmaylike] The Basics About What You Can Claim When Filing You must pay income taxes on all your income earned throughout the year. However, that income is reduced by a few things. The further you can reduce your taxable income, the less you tax you will pay. There are three general categories of tax reduction methods: Standard or Itemized Deductions Everyone can claim either the standard or itemized deductions. Standard deductions are a set amount that is based on your filing status. Itemized deductions are based on actual expenses that you incurred throughout the year. You can choose to use the higher deduction. The higher the deduction, the less tax you will have to pay on your income because your income decreases on paper. Itemized deductions include things like medical expenses, state and local tax payments, and home mortgage interest deductions. Itemized deductions will only decrease your income by a certain percentage, or up to a specific point. Adjustments Some adjustments to your income may also be available. These include things like paying student loan interest or alimony. Adjustments are more valuable compared to deductions because they decrease your income dollar for dollar. Credits A credit decreases your taxable income as well. Some credits are refundable while others are not. For example, you get a child tax credit simply for having children that qualify for that credit, but that credit will not be paid out to you if you do not have any tax obligations. On the other hand, the Earned Income Credit, which is available for low-income filers, will be refunded to you even if you do not owe any taxes. There are a wide variety of deductions and credits available. Take a look at the federal forms and related schedules to determine whether you might qualify for any of these. How to File Your Own Taxes If You Live Overseas If you earned income in the United States as a U.S. citizen or resident alien, you likely need to pay taxes on that income. This is true even if you live overseas. You can still choose to e-file or mail your tax return to the IRS once you have it prepared, just as if you physically lived in the United States. In some cases, you will be taxed on the income that you earned throughout the world. However, you may be able to deduct a portion or all of the revenue that was not made in the United States in some circumstances. Filing Online The IRS offers an online filing option that is free for individuals that have an adjusted gross income below a specific threshold. Generally, your income must be below $66,000 to qualify for this service. You can also file online by using a commercial tax preparation software. Examples of this type of software include: H&R Block TurboTax TaxCut TaxSlayer There are many programs available that will file your taxes for you, often for a fee. Knowing how to file your own taxes can be a great way to save money, but it can be tricky as well. If you want to file your taxes yourself, be sure to read the form instructions thoroughly and get familiar with various tax saving opportunities before you begin preparing your return.
How to Sell Products Online
Many shoppers are turning to online shopping. The U.S. has the second-largest e-commerce market in the world, with a revenue of $599.2 billion in 2021. So, as a business owner the online marketplace is a great medium to sell more products and extend your service reach. In fact, every entrepreneur today is looking into how to sell products online, especially in a competitive marketplace that gets bigger by the day.
Although there is endlessly increasing competition, with the right e-commerce tools you can give your products more visibility, provide outstanding service to your customers, manage your business processes and take your business to the next level.
Whether you are new and wondering how to sell products online or trying to grow an existing online business, these e-commerce tools will significantly impact your business and help you stand out from the endlessly increasing competition.
1. E-Commerce Platform: Shopify
An e-commerce platform is the bedrock of any online businesses. Shopify is a popular e-commerce platform entrepreneurs can leverage. This all-encompassing e-commerce platform comes with useful tools, like a website builder with downloadable themes, built-in marketing tools for digital campaigns and analytics, a shopping cart with 100 different payment gateways and much more.
- 24/7 customer support.
- Integrated search engine optimization (SEO) and marketing tools.
- Easy setup and use.
- Data security.
- Multiple customizable features and payment gateways.
- Processing and transaction fees can be high.
- No email hosting.
2. Sales and Logistics Tool: Veeqo
Veeqo is an all-round fulfillment platform that helps sellers fulfill orders directly to their customers, retail shops and drop shipping platforms. Veeqo also provides warehousing and logistics to its users.
You’ll also enjoy the software’s inventory updates and order management features with its prepaid plan.
- Simple interface.
- Connects seamlessly with popular e-commerce platforms like eBay, Shopify and Amazon.
- Fulfillment automation.
- Warehousing and logistics.
- Local and international shipping.
- Difficult customization.
3. Marketing Tool: MailChimp
MailChimp is a marketing software that helps businesses connect with their target audiences and customers. MailChimp makes marketing easier for online business owners, as they can share updates, promotions and other information with their customers with its email marketing feature.
Another reason we have selected MailChimp is that it easily integrates with Shopify and collects vendors’ data at once.
- Free basic plan.
- Easy to set up and use.
- Downloadable and flexible email marketing templates and newsletters.
- Easy integration with Shopify and other e-commerce platforms.
- Abandoned cart messages.
- Mailchimp can suspend accounts at will.
- More suitable for small businesses. It may be difficult to scale.
4. Communication Tool: Slack
Slack is a messaging platform that allows business owners to connect with their teams. An e-commerce business has many moving parts, and entrepreneurs can easily establish a solid internal communication process using Slack. This way, you can boost productivity (especially if you have remote workers), stay organized and manage day-to-day workflow.
- Easy collaboration across departments.
- Seamless integration with Shopify, Zapier, Zendesk, etc.
- Secure cloud storage.
- Free plan available.
- Can double as a customer support tool.
- It can be challenging to keep up with notifications in a fast-paced e-commerce environment.
5. Customer Service Tool: Zendesk
If you run an e-commerce business and want to sell products online continuously, you must offer your customers the utmost attention and experience. Zendesk is an e-commerce tool that helps with this. The customer support platform allows users to handle and sort tickets across all their sales channels and social media platforms. You can also use Zendesk to add a live chat feature to your Shopify platform.
- Flexible ticket management across different platforms.
- Integrates with Slack and Shopify.
- Automated responses.
- Live chat feature.
- Customer analytics and reporting feature.
- Charges per user.
- Data uploading and exporting can be challenging.
6. Analytics Tool: Google Analytics
Analytics help businesses measure performance, marketing success, etc. With an e-commerce software like Google Analytics, online businesses can get insights into their customers’ needs and behaviors, website visits and overall traffic.
The businesses can then use the data to make informed decisions around marketing, determine high-selling products and build a solid customer base.
- Customer targeting and retargeting.
- Campaign monitoring and evaluation.
- Competitor analysis.
- Can reduce website bounce rate.
- A clear understanding of user behavior.
- Metrics can’t be 100% perfect.
- There’s too much information sometimes.
The e-commerce industry is massive, and so is the competition. Whether you are just starting an online business or trying to grow an existing one, you will need the right tools and software to make the most of your journey. We’ve highlighted some essential tools, but to determine which is best for you, you should consider your business size, budget and needs.
Optimizing your business with the right e-commerce tools will help keep your customers happy, provide you with a solid standard operating procedure (SOP) and ultimately help you make more sales.