Regardless of where your employees live, you must

Regardless of where your employees live, you must provide all regular employees with a W-2 at the end of each tax year.

Contractor Tax Issues: The independent contractor is responsible for all of his or her own taxes. Therefore, most virtual corporations prefer to work with contractors, or as they are often called, freelancers. As a virtual business owner, your only tax responsibility for freelancers is to provide them with a Form 1099 at the end of the tax year, provided you paid them more than $600 in the year. You must keep track of any outsourced work you purchased so you can report it on your own tax forms.

NOTE: If you're not sure whether a person who has done work for you is an employee or a contractor, the IRS provides a set of 20 questions to help you make that determination. Basically, if you directly control the way the work is done (you are in direct supervision of the person working for you), you should treat them as an employee. If you simply assign a task and do not control how it is done, but rather receive a finished piece of work after a specified time period (such as web copy writing, site design, or outside bookkeeping services); the person handling the work is considered a contractor.

TOOLS OF THE TRADE

You have your home office. You've filed your business certificate. You have goals for your company, and you know exactly how you're going to meet them.

Now what?

When all of your planning and preparation is complete, it's time to start building the virtual foundation of your business: your web site. Whether you're just starting out, or already own a business and want to expand, the following techniques will help you make the most of your virtual corporation.

Your Web Site: Like a Building, Only...Not

Because your web site is the primary liaison between you and your customers in a virtual corporation, you must put as much time and work into it as you would constructing a brick-and-mortar store or office. Your web site is a showcase for your company, your products and your services. A poor web site will turn away customers faster than a poorly laid out store or office. Customers and clients arriving at a physical location are more reluctant to go elsewhere because they would have to get back into their cars and drive there. On the internet, finding another company to do business with is just a few clicks away.

Market research shows that web sites have between three and ten seconds to entice visitors to stay. Therefore, first impressions count, big-time. There are two stages to making a successful business web site: first, the design and content placement; next, attracting visitors. Each stage has several important steps. You can choose to invest either time or money, or a little bit of both, in creating a dynamic web site that will support your virtual corporation.

Naming Your Domain

Often your domain name will be the first thing people discover about your virtual corporation, whether through advertising, word-of-mouth, or search engine results. The domain name is whatever comes between the www and the .com in your web address: for example, in www.google.com the domain name is Google; and in www.big-money-from-mink-oil-extract.com the domain name is big-money-from-mink-oil-extract. A domain name is located in the address bar of a web browser, and may be different from the title of your web page, which is the text that appears at the top of your window in the left-hand corner of the uppermost bar-appropriately called the title bar.