My (Only) 4 Tips for Internet Business Taxes and Bookkeeping – All You Need to Know

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I'm asked questions like the one below often...

Taxes for Side Hustles

Since I'm not a CPA, I don't answer these questions with actual financial advice. That would be wildly irresponsible and I have no interest in giving bad advice to my followers.

However, I can give 4 simple suggestions that will ensure you get your business taxes and bookkeeping right.

This short article is literally all you need to know about taxes and bookkeeping for your internet business. 

That sounds crazy, I know, but stay with me...

Oh, and these tips are so simple that they apply to taxes across the globe.

#1 Expect to Pay More (But Don't)

Here are the biggest buzzkills of my life...

  • Ohio State getting blown out by Florida in the 2006 national championship game. 
  • My first tax audit from wildly underestimating my first year of self-employment taxes. 

In the United States, at least, the complexity of the tax system makes predicting how much you owe extremely difficult.

Pair that with an irregular income stream or two and you can easily find yourself in trouble if you didn't set aside enough cash to pay Uncle Sam.

I added "but don't" to this because you should never blindly overpay taxes.

Yes, you'll get it back, but you're basically loaning the government interest free money that you could use in your own business to grow!

The biggest lesson here is to be sure to assume you will owe more vs. less so you don't end up in a hole. 

But how much should you actually pay and when?

This brings me to the most important thing .... 

#2 Hire an Amazing CPA 

This article is so short because a CPA will fill in every other tax related question you can ever have.

Anyone who isn't a CPA who gives tax advice is being irresponsible and cavalier. 

Staying in tune with the changes to the tax system is something that a CPA will do for you. The average person won't know these things, they have no need to!

We have businesses to run. We shouldn't be spending time learning something that is someone else's full-time career and that changes constantly. 

"But a CPA is expensive! I'll just do it myself and save money." 

This is common but awful logic.

A good CPA is only "relatively" expensive. 

Assuming that you're earning a full-time income from your business, you could pay a CPA $5,000 to file your taxes but they will help...

  • Maximize your return or minimize your amount owed by finding deductions and credits. This amount is almost always more than they cost upfront. 
  • Avoid audits and/or expensive penalties.
  • Give you the peace of mind that you are doing things right and don't have to plan for headaches down the road. 

The best way to find a great CPA is through a referral from a friend or trusted business associate.

Perform your CPA search in the same way that you'd go about hiring a full-time employee. Take your time, read reviews and find someone you can count on. 

#3 Outsource Your Bookkeeping

Speaking of counting, you need someone to properly organize your business transactions. Income and expenses need to be properly logged and categorized so your CPA can maximize your tax return. Moreover, you can create a paystub to have proof of your income and expenses.

CPA vs. Bookkeeper

There is a big difference between a CPA (accountant) and a bookkeeper.

You need both tasks (accounting and bookkeeping) and they are not replacements for one another. 

A CPA is a certified public accountant. They handle the actual filing work for your business. They file your taxes (federal, regional, individual, etc). These are licensed individuals who must regularly pass various certifications to legally offer their services. 

Most CPAs do offer bookkeeping services as well, but not always.

A bookkeeper doesn't need the same certifications and does less "skilled" work. They are organizers of transactions and help create financial reports that help you understand the financial health of your business and help the CPA know what to report on your tax filings. 

Read more about the difference between a CPA and Bookkeeper here.

My suggestion for bookkeeping is a company called

With Bench, you simply connect your business bank accounts and they assign a bookkeeper to you who organizes the transactions for you. The data is then compiled into easy to view reports that make it easy to see exactly what is going on in your business. 

The dashboard is easy to navigate and the entire process is extremely intuitive. 

The service will work for any type of business as well. 

  • Agencies
  • E-Commerce (Amazon FBA, eBay, Shopify etc.)
  • Affiliate marketing
  • Freelancers
  • Any combination of income streams
  • A-N-Y-T-H-I-N-G!

You can also upgrade to their premium plan and have them do everything for, including your tax filings!

Bench Pricing

I have used them in my own businesses for many years and have had nothing but a great experience.

You can read my full Bench review here (or watch my video on YouTube). 

I can't recommend Bench more highly. 

#4 Have All Business Transactions on Their Own Cards and Bank Accounts

The last piece of advice I am comfortable giving: keep things organized! 

Avoid mingling personal expenses and business expenses. This isn't the end of the world, but it can be problematic if you're audited.

Ask your CPA for recommendations on setting up your business checking accounts if you haven't already done so. Also, be sure to get a great credit card with relevant rewards and cash back offers if possible!


There is a lot more involved with taxes and bookkeeping that I cover in this article. Fortunately, you don't need to learn it all if you follow the steps I've outlined above. 

Hiring a CPA and bookkeeper will carry the workload for you. Your job after hiring them is to ensure you're aware of what you owe and to keep your expenses and revenue organized in their own accounts (away from your personal expenses. 

Don't forget to check out Bench for your bookkeeping and CPA needs.

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  1. Something else to consider is that there is a WIDE range of bookkeepers and accountants.The biggest difference is: Some know eCommerce, and most are clueless.When you are choosing a partner to work with, I would ask them a few questions to see if they pass the sniff test:- Looking at your current client profile, what industries are you in? (Hint: if they say a few different industries, they are NOT specialists. They may know the basics, but won't have a clue how to give advice when Amazon sends you a 1099 and revenues don't match). – How do you communicate with clients? (If they like phone calls all the time and you like text, it could be a barrier. Also, look to see if they actually talk to you about your business, or if they just send you an invoice.)- How much experience do the people working with you have? Is the company run by Accountants, eCommerce People. or Marketers?- Where are the people located that are working on my taxes and bookkeeping? A lot of firms use overseas labor. Do you want your financials dealt with by someone in India or the Philippines?

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