Question: What are the tax liabilities for personal small business internet sales?
I’d like to sell my hand-made jewelry through an internet site through which one can sell hand-made items for a small fee. The site is similar to E-bay. I can’t seem to find information concerning income tax (U.S.) regulations without dredging through IRS guidelines. Does one simply keep track of sales and file a 1099, or does the IRS even monitor this type of income? Any advice is greatly appreciated.
Would it be profitable and advantageous to get a tax id. number in order to purchase supplies required for my jewelry?
Answer by ninasgramma
The simplest way to do this would be as a sole proprietor and file Schedule C. You would pay income tax on the net profits as figured on Schedule C, subtracting your expenses.
Read the instructions to Schedule C. Or just keep track of your income and expenses and take that to a preparer.
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