Yes, I know we all like to put our taxes off to the last moment, even when Uncle Sam owes us a fat refund. So, I doubt you’re ready to file if you owe taxes from your online business earnings.

But what I recommend is this: Start filling out the appropriate forms today or input your information into good tax software. By time you’re done with this process you’ll know if you’ve got a refund coming your way or you, gulp, owe some taxes.

If you’ve had a good year online, then don’t be surprised if you owe income, social security, and Medicare taxes, as they aren’t withheld from your checks from merchants.

The main reason I start mine early is that I give myself a few months to set aside the money to pay my tax bill. Generally my funds are earmarked for regular expenses and projects, so I give myself a head start when saving.

Another very important note: If your tax bill is over $1,000, you may owe penalties to the IRS. Taxes are considered pay-as-you-go and the IRS doesn’t like it if they don’t get their hands on it ASAP.

So, if you have a year where you owe close to $1,000, consider filing a 1040-ES for the following tax year and remit taxes quarterly to avoid penalties. If you feel like you’ll be in this situation, I highly recommend that you contact an accountant or tax professional.