How would income taxes work in NJ if I were to buy an item for 40 dollars and sell it for 60 dollars and run a wholesale company?

How would income taxes work in NJ if I were to buy an item for 40 dollars and sell it for 60 dollars and run a wholesale company?

Would I make any profit after taxes since I am only making $20 per item?

3 Answers

Relevance
  • M
    Lv 6
    6 years ago
    Favorite Answer

    What you are describing is not a wholesale business.

    One example of selling wholesale is selling goods to a retail store for resale - like a shoe or clothing manufacturer.

    "Would I make any profit after taxes since I am only making $20 per item?"

    Absolutely & the more you sell the larger your profit. Your profit will depend mainly on how many you sell... This would be a good way to make some extra money & could possibly lead to a full time business.

    I think its a great idea if you have a market for the item you are going to sell..

    You will have to charge NJ sales tax if this is taxable item & register for a sale tax permit with your state..

    You would be required to file a tax return & pay SE tax if your NET earnings are $400 or more.

    Depending on your total taxable income you may or may not owe any fed or state income tax.

    If you are a dependent on your parents tax return - the first 6,200 is tax free for fed. After that, you would pay 10% on the next 9,075 of income.

    If you are not a dependent, the first 10,150 is tax free for fed & 10% on the next 9,075.

    You don't have to file or pay income taxes in NJ unless you have gross income of 10k. After that, tax rates start at 1.4% & go up from there depending on your taxable income

    If only SE tax -- 2.83 per item for SE tax if applicable if you don't have any expenses to deduct -- otherwise less Remember, you don't pay SE unless your net earnings after expenses is $400 or more.

    Best of Luck

    • Login to reply the answers
  • tro
    Lv 7
    6 years ago

    if you are wholesale you don't buy it for one price and sell at another, that is retail

    that would incur sales tax as well as income tax on your profit

    • Login to reply the answers
  • 6 years ago

    Only the profit is subject to income tax and not the gross sale.

    • Login to reply the answers
Still have questions? Get your answers by asking now.