SLC-S21W5: How to Handle Amazon Taxes

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It is always a joy for me whenever I have the opportunity to participate in the Steemit contest weekly and today I will be participating in the crypto academy community contest. Stay tune below.

Talking about Nigeria music country, whenever there is self employment income, it is always tagged under the category of the Personal Income Tax which is called PIT. Most of the times the Personal Income Tax operates on a rate that is progressive and not only that, most of of the time, it is within the range of 7% to around 24%. But even with the percentage, it also depends on something called the taxable income.

The Progressive rate for the Personal Income Tax is broken down to around 6 categories which is this below. Let me use the example of a particular individual income below;

• First ₦300,000 = 7%

• Second ₦300,000 = 11%

• Third ₦500,000 = 15%

• Fourth ₦500,000 = 19%

• Fifth ₦1,600,000 = 21%

• Sixth ₦3,200,000 = 24%

Most of the time, it is always advisable that the individual that is employed actually ask for something called the annual return from the FIRS which is called. The Federal Inland Revenue. Not only that, that person is also advisable to have his or her own Taxpayer identification number TIN.

Amazon Affiliate Income and Deductions

When it comes to the Amazon Affiliate Income and deduction, well, I will say the Amazon Affiliate Income is under the business income and also fall under the PIT also most especially if you are a self employed individual in Nigeria. There are some things Nigeria gives attention to below;

• Business Expenses: Most of the time, there are actually expenses that are even legit which are associated to the affiliate income. Business expenses like the marketing costs and also the website hosting fees.

• Allowable Personal Reliefs: Most of the time also, if you are a self employed individual, you can benefit from the relief. There are some reliefs like the CRA relief.

At the end of the day, it is always advisable in Nigeria that for you to get maximum return in your deduction, you can make use of that you keep your financial records correct.

I live in Kwara state Nigeria and so for us, we are always expected to submit something called the W-8BEN form. One of the things that this form ensures is to make sure that you are not a non US person and helps you to reduce some unnecessary taxes you might want to add up because of the US taxes assuming you are a US person.

Steps to Submit the W-8BEN Form

• Log in to Your Amazon Account: This is the First thing for you to do..you make sure you go to the Amazon associates website and then log in as you can see in the picture below.

• Access the Tax Information Section: Then I make sure I go to my account settings so that I can provide my tax details.

• Start the Tax Interview: Then I begin to fill in the Tax interview details and follow the process. I will be asked some questions but I will fill it up.

• Complete the W-8BEN Form: Then I will complete the form by inputting all the details. My full name, my country, my TIn and many more as you can see in the picture below.

• Review and Submit: Then one will make sure to verify all the details are correct and then I submit. I wait for confirmation from Amazon and that is it.

Well in my country Nigeria, you will make use of the Tax filling process been done on the Federal Inland Revenue service website which is called FIRS. There are some vital steps by steps that need to be followed.

• Registration for Tax Identification Number (TIN): First of all, you will need to register to get your Tax identification number. How you can complete the registration is by visiting the FIRS website which is

www.firs.gov.ng

Then you complete the registration form by providing the correct details you are asked of. When you complete the submission, you will be given your TIN.

• Choose the Type of Tax: One of the things about Nigeria tax is that Nigeria have different types of taxes. We have the personal income tax, we have the value added tax and many more. At that particular time you will need to pick the type of tax based on the situation..

• Access the FIRS e-Services Portal: The next step to follow is after you must have gotten your TIN, then you can now move forward to complete the filling through making use of the FIRS e-Service portal which is this below;

https://www.firs.gov.ng/

With that, you can login with your TIN and then choose your tax category like I said earlier.

• Fill Out the Tax Forms: Then you make sure that after you have logged in, you fill all the necessary details that need to be filled based on your income.

• Submit the Tax Forms: Then you submit your tax forms so that all the details you provided will be reviewed in case there is any need for correction. After the details are confirmed, you will be given ahead to submit your form through the portal I talked about above.

• Pay Your Taxes: Then you make sure that you pay your taxes depending on the amount of tax payable. You can either use bank payments or online payments for your tax payments.

• Obtain Tax Clearance Certificate (TCC): Then lastly, you wait to fet yojr tax clearance certificate as that means you have compiled with the tax obligations.

When it comes to managing our taxes, there are crucial and important reasons attached to that which I want to talk about below;

• Compliance with the Law: In fact this is the first, the more you stay compiled with tax payments, you are fulfilling the law. In my country Nigeria, if you fail to pay your taxes, it can even lead to legal action.

• Maintaining a Good Financial Reputation: it also helps to make sure that you have a very good financial reputation that is needed for the sustainability of your business.

• Access to Government Benefits: In Nigeria, there are some benefits that you will not be able to have access with if you did not pay your tax, by the payment of taxes, it helps you to have access to government benefits.

What I Learned from This Process

After all the process, there are actually some few lessons I actually learnt from it which I will be sharing below;

• I actually learn the importance of record keeping because it helps you to keep very detailed records.

• I also learnt in detail the role of all those online tax portals that I have been aware of years ago.

• Then I also learnt about everything about the tax deductions and credits also.

• Then lastly I learnt the complexity involved for taxation for all those online income.

Thank you for this lecture, looking forward to more interesting and benefiting lectures in the more weeks to come

I invite @josepha , @newekemini5 and @okere-blessing to drop a very constructive comments on this post and also to participate in this contest.