How much do you have to make in online sales before paying taxes?
I live in Ohio and was just wondering. Whats the amount in online sales can we make before we have to pay taxes? I googled, but cant seem to find a solid answer anywhere.
Thanks in advance.
- BobbieLv 78 years agoFavorite Answer
All of your self employed business income will be required to be reported on your correctly completed schedule C and the SE of your 1040 income tax return to determine your NET PROFIT from your online sales business operation for the tax year.
A NET PROFIT amount of $433 or MORE you will owe your social security and medicare taxes on the total NET PROFIT for the tax year and you may even need to make some quarterly estimated tax payments during the tax year for this purpose.
When you are doing this online it is very possible that you do have a filing requirement using the schedule C and the SE of the 1040 income tax return and you could very possibly have a BUSINESS operation ongoing even IF you do NOT really think that you have an OFFICIAL business operation or else who the social security number that you have used to register with your online account with for this purpose would NEED to report the income from the sales and money that is collected for this account that you have set up for this purpose.
And when the online account does get around to sending out the 1099-K Merchant Card and Third Party Network Payments to your account name for sure you had better have filled and filed your 1040 income tax return correctly and completely because the IRS will be receiving a copy of the same 1099-K that you would have in your hand for this purpose.
And even IF you do NOT receive the 1099-K copy you would still be required to use your good detailed daily records of all of your TOTAL sales and expense on your correctly completed income tax return for this purpose and if you would need to determine if it would be easier and better for you to make the quarterly estimated tax payments during the tax year or JUST wait until the end of the tax year and try and try and make sure that you do have enough funds saved up to pay the total amount of taxes plus the amount of interest and penalties that MIGHT be added to that owed amount for failing to pay the amount timely each quarter in the year as they should have been done at that time with the last for the 2012 tax year being due around January 15, 2013.
Tax Tips for Online Auction Sellers
Home-Based Online Auction Seller Businesses
If your online garage sale develops into a business and/or you have recurring sales and are purchasing items for resale with the intention of making a profit; you may have started an online auction business.
Online Auction Sales Trade or Business
If you are operating a viable online auction seller business you may be entitled to deduct business expenses. Do you have an established business and you are augmenting your sales with online auction sales? Then, remember to include the online auction sales in your business income. View an IRS video on Business Income or read a transcript of the video.
Hope that you find the above enclosed information useful. 05/17/2012
- Wayne ZLv 78 years ago
Most likely, Ohio sales taxes would be due on the first dollar sold to someone in Ohio.
If it is your only income, you will owe federal taxes if you make $400 or more for the year.
If it is in addition to other income (ie. a job), any additional income (even $1) must be reported.
- JudyLv 78 years ago
If that's your only income, $400.
If you file a return for any other reason, you must claim the online income from the 1st dollar.
- troLv 78 years ago
if you are operating a business on line, if your profit is $400 or more you will subject to self employment tax
the amount of your income tax will depend on your total gross income, your status and your deductions
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- sophiebLv 78 years ago
Call the tax offices of your state government and they will tell you. Generally it's from the first sale.
- SlickterpLv 78 years ago
$400 for the year if you have no income. If you have other income, 50 cents.