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paying taxes, first year small business and IM

by apocalypsejay
9 replies
Hi I am a US citizen and need to prepare my taxes. I have yet to get any tax software but probably will. Regardless, my question is this....

!) Is it true in the US that if as a small business person you make less than 9,020 dollars then you do not have to file Self Employment tax (SS and Medicare at 15.2% of net income).

I am an eBay seller who made slightly less than 9000 dollars this year (net profit). I also have a real job as an employee.

Any tax experts on here? Thanks
#business #paying #small #taxes #year
  • Profile picture of the author Tsnyder
    Anyone can claim to be expert at anything on the internet. Do yourself
    a huge favor and ask these questions of a tax professional in your area.

    Any other response should be taken with a very large grain of salt.
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    • Profile picture of the author kindsvater
      Originally Posted by Tsnyder View Post

      Anyone can claim to be expert at anything on the internet. Do yourself
      a huge favor and ask these questions of a tax professional in your area.

      Any other response should be taken with a very large grain of salt.
      Apparently, experts cannot answer questions online. This also isn't a local "area" based question, except for the qualification the person asking is in the US. I would not, however, consider this type of question to require much expertise.

      .
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      • Profile picture of the author Tsnyder
        Originally Posted by kindsvater View Post

        Apparently, experts cannot answer questions online. This also isn't a local "area" based question, except for the qualification the person asking is in the US. I would not, however, consider this type of question to require much expertise.

        .
        This poster appears to be a fairly new member. How would he
        know your level of expertise? As a general rule the advice I offered
        is sound and you know it.

        I didn't recommend a local professional because I thought the
        question had geographic implications. I recommended it because
        I thought it might be good for the poster to develop a relationship
        with someone in his local area who could provide assistance on an
        ongoing basis.

        Did you get up on the wrong side today?
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  • Profile picture of the author kindsvater
    I am not sure where you got that number, maybe by confusing personal exemptions and a standard deduction to determine what personal income is taxable?

    FICA taxes are different taxes. For self-employment tax due to business income I suggest starting with Schedule SE - http://www.irs.gov/pub/irs-pdf/f1040sse.pdf and working through the flow-chart to see what may be owed.

    Here is a useful online self-employment tax calculator for when you have some business income and are also an employee:

    http://www.bankrate.com/calculators/...alculator.aspx

    although not current for 2014, it will give you a ballpark of what FICA taxes are owed based on how much you made as an employee which was also taxed.

    .
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  • Profile picture of the author BeyondContentNY
    I would honestly seek out a reputable accountant that has handled income through a source such as eBay. It may not be what you want to hear, but that $9k is taxable. Whether it falls under the category of self-employment, or it's simply money earned through a hobby, you want to make sure that you pay the proper taxes.

    Better to pay a little now than a whole lot more down the road.

    Your accountant will also know what to write off, and how much to write off. They make the magic happen.
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  • Profile picture of the author BeyondContentNY
    Remember, everything you sell on eBay has a paper-trail... let your accountant find legitimate write-offs to help you lower your tax burden. In the end, it will be less of a headache for you, and you'll probably come out ahead.
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  • Profile picture of the author tristatemedia
    I WOULD STILL CLAIM THEM AS PROFITS. but write off all your expenses. i combine my online income with my regular income.
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  • Profile picture of the author Webdesign353
    Any amount of income you make in the UNITED STATES is taxable. As for what bracket you fall in is a whole different story. I am guessing since you are asking this question you do not have a business license. Marketers that are legitimate have a business license as well as ebay sellers. People who sell here and there usually do not and still file the income. Do you resell items that you strictly buy to resell? Do you sell items you make? Do you sell your old stuff?

    Right. You need to talk to a professional such as an accountant. There are too many factors that we dont know about what you do on ebay.

    P.S If you are selling anywhere near 9,000 worth of merchandise a year you should have a business license
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  • Profile picture of the author Ronno99
    Yes, you should report this income.
    The man insists on and is quite serious about collecting his share of your profits.
    I wouldn't mess with them.

    Tax software like turbotax should be enough. It will come down to entering how much revenue and expense you had, the software will put it on the right forms. You'll probably have to categorize the expenses. I think after you run through it once you'll find it is pretty simple as sole prop.

    If you incorporate you have leveled up and need an accountant. Don't do that with a net of $9k though.
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