Inflation has reached record levels and while there are signs it may be easing, prices on just about everything remain high. Congress has worked to pass legislation such as the Inflation Reduction Act aimed at lowering costs for American consumers and businesses. One way they are doing this is by allowing companies to pay their workers in digital currencies such as Bitcoin and by taxing goods and services such as the gas used in transportation, which is another way digital currencies like Bitcoin fit in with the new legislation.
The Gas Tax
Since the dawn of the automobile industry, gas tax has been used to fund highway construction and maintenance. Today, with the rise of the electric car, gas tax is even more important as a source of income for the government.
On January 1st, gas tax was increased from 8 to 26 cents per gallon. While most experts agree this will likely rise again, as a reference, gas tax was at 18 cents per gallon in 2016. It should be noted that while automobile manufacturers have moved toward electric cars, they have also increased the size of their vehicles, resulting in substantially higher fuel usage per vehicle. Thus, increased gas tax is likely to continue to fund highway construction and maintenance even when the cost of gas per gallon is lower.
The Federal Excise Tax
In the same way gasoline and other goods are becoming more expensive due to inflation, so is the price of shipping. To try and curb this rising cost, the government has passed legislation such as the Federal Excise Tax. This is a federal tax charged on goods and services that are shipped or consumed in another state. The tax is charged at the time of the shipment or use and is usually based on the value of the goods being shipped or used. For example, if you buy a $500 television set from New York and ship it to California, you may have to pay federal excise tax on the $500.
This tax can be quite confusing. For instance, if you have a business in New York selling New York-made goods to customers in California, you may have to collect sales tax from those customers in California. Alternatively, you may choose to register for a federal tax ID number (EIN) with the IRS and use that number whenever you ship or consume goods in another state. When using a EIN, you are responsible for collecting and paying any sales or use taxes in the other 49 states as well as Washington DC. If you do not have a business, you may decide that registering with the IRS and using an EIN is the best option to minimize your tax liability.
Deductible Gift Card
If you are selling goods or services to customers in another state, you may want to consider setting up a deductible gift card. A deductible gift card gives the holder the ability to write off a portion of the cost of the purchase against the year’s income.
The gift card may be set up with a specific amount that is deductible on an individual income tax return. For example, if you want to give a $50 gift card to a customer for their first smartphone purchase (costing about $200), you would need to contact the company that the card is registered with and have a $50 credit applied. On your individual income tax return for the year, you can then deduct the $50 as a business expense.
This is an easy way to make money online and it’s tax-deductible. All you need is a computer and the ability to navigate the internet. You can find numerous gift card registration sites where you can get started for free. Once you have completed the sign-up process, you can begin searching for and buying gift cards for customers. The more you buy, the more you can deduct.
Crypto Currencies
In the last year, the value of Bitcoin and other cryptocurrencies have increased dramatically. In fact, the value of Bitcoin has risen from about $3,500 per coin to over $13,000 per coin. This makes them a desirable option for those looking for ways to make extra cash online.
Those who prefer to work remotely may want to consider taking advantage of the growing popularity of cryptocurrencies. One of the biggest concerns of those who purchase and use cryptocurrencies is security. Hackers have stolen millions of dollars from famous crypto-related businesses. Thus, to try and allay these concerns, the businesses have worked to improve security for their platforms.
The most popular and well-known cryptocurrencies such as Bitcoin offer additional benefits to those wishing to make money online. First, the value of a Bitcoin stays relatively stable. On January 1st, one Bitcoin was worth about $3,500 per coin. By October 31st, one Bitcoin will be worth about $11,600. Second, as more people move toward online spending and away from cash, the value of Bitcoin increases as more people want to purchase it. Third, since Bitcoin is a scarce resource, those who purchase it are competing for it, driving up its value. Finally, as the number of people using cryptocurrencies increases, so too does the potential for growth to an even larger audience.
Accepting credit cards
One of the biggest issues for online merchants is the cost of accepting credit cards. If your business operates entirely online, maintaining a secure physical card reader is cumbersome and expensive. To try and ease this burden, numerous companies have developed products that let online businesses avoid the cost and effort of accepting credit cards.
The best known and most popular solution among these companies is Stripe. Stripe enables online businesses to accept payments through their websites and apps. The beauty of Stripe is that it provides a payment form that is already built into the website or app. This effectively cuts out the hassles of having to build and install a separate payment form.
Stripe has a free version and a business version for those who want to take advantage of some additional features. Both have a 30-day free trial. After which, businesses have to decide whether or not to continue with the service. The cost to accept payments with Stripe is 2.2% per transaction. This is less than the cost of doing business-to-business payments via Bitcoin (3.5%) or Ethereum (3.3%).
Pay With a Credit Card
One of the main reasons why many companies avoid accepting credit cards is the effort it takes to process them. To make sure their business is not cheated by scammers, businesses must verify identities and protect their data from fraud. This is why many choose to avoid the risk by not taking credit cards.
To those looking to make money online, this may mean you will need to find other ways to pay. One of the simplest and most effective ways to make money online is to accept paypal payments. Paypal allows users to send and receive money online through their accounts. Since almost all online businesses can be paid through paypal, it’s an easy option for any business to get started.
The main benefit of accepting paypal payments is that you do not need to have a physical bank account in order to be able to receive money. This makes it extremely easy for anyone to get paid online as all they need is an email address and a PayPal account. As a business owner, you set the price you want to pay for goods and services and when a customer decides to pay you through PayPal, you receive the funds in your account within 2 business days. There are no fees for using PayPal. It generally costs the business owner nothing to accept PayPal payments because the fees are taken out of the cash flow.
Offering a Bargain
For those who want to make money online, offering a discount for those paying with cash is one way to go. For example, if you are selling an iPad for $500 and someone decides to pay with a cashiers check, you may want to offer them a 10% discount.
This is a straightforward way to make money online and it requires little to no effort to set up. Simply find a product you are selling that has a 10% discount for cash payments and you are good to go. You can then use a tool like Gravity to track the number of times your website visitors use a cash discount and how much money they spend while using it.
The downside to this option is that you need to continuously find new products with discounts to offer and it can be difficult to find products that provide meaningful discounts for online businesses.
There are also numerous pitfalls to consider when offering cash discounts. For example, if you discount an item that has a warranty, the warranty may be void if the product is damaged or broken during the discount period. In addition, if you discount an item that is still under warranty, the manufacturer may not appreciate you knocking off their product while it is still under warranty.