I sold $25k of cosmetics on the internet do i have to pay taxes, i never collected, if i have to pay how much is going to be.?

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  • 1 month ago

    You pay income tax on any profit.

    You left out EVERYTHING required to determine if you should have collected sales tax. If you were legally required to collect sales tax, you are liable for that amount, even if you failed to collect from your customers.

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  • Judy
    Lv 7
    1 month ago

    yes on any profit you made. Federal income tax, self employment tax for social security and medicare, and state and local tax if you have then where you live. Total you owe depends on a lot of things you don't mention,but probably 25-30% of your profit.

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  • 1 month ago

    You pay income tax and the self-employment tax on your business profits, which you cannot calculate until you know (and can document) all of your business expenses. State sales taxes that you were supposed to collect and did not come out of your pocket, but that is a separate matter. You owe that to your state. You may deduct that amount from your gross earnings as an expense.

    Your state will tell you how to calculate sales tax on gross sales if the tax is included in the selling price and not added to the purchase price.

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  • Amy
    Lv 7
    1 month ago

    You owe income tax on the profit (not revenue).

    You might be required to collect sales tax for a few states, if you have enough sales in that state.

    https://smallbiztrends.com/2019/01/list-of-states-...

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  • Eva
    Lv 7
    1 month ago

    Check the laws in your state regarding sales tax. In some instances you would not have to collect and pay sales tax on out-of-state shipments, but you would on any in-state shipments. The amount will be whatever the sales tax rate is in your state. You will have to pay income and self-employment taxes on any profit you made.

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  • 1 month ago

    You never collected the money? Yes, it is taxable income.

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  • 1 month ago

    Unless you live in a state without sales tax, you are going to have to pay sales tax.  If you fail to collect it from your customers, you are required to pay it out of your own pocket.

    You are also required to pay income tax and self employment tax. 

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  • Anonymous
    1 month ago

    Depends how much you paid for the cosmetics.  

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  • 1 month ago

    Yes, you have to pay tax.

    The amount of sales tax depends on the state and could be anywhere from nothing to about 1/10th ($2500).

    The amount of income tax depends on the total of all your income for the year, but is probably 10-22%.

    The self-employment tax is 15.3% of 92.35% (don't ask how they came up with this), which is approximately 14%.

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    • Coffee Drinker
      Lv 7
      1 month agoReport

      Also note that the income tax and self employment tax are applied on net profits, so for example if you paid $15k for the items and $3k in expenses (such as fees to ebay or whatever), then you're only taxed on the $7k profit ($25k-$15k-$3k=$7k)

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  • 1 month ago

    Gross sales - cost of goods sold - other expenses = net profit. You pay tax on the net profit at whatever tax level that money falls in. Get a simple bkpg program and or employ an accountant if you need help.  {The only taxes you would collect are sales taxes, and for that you remit the correct account to each state - out of your own pocket because you failed to collect from the customers.}

    Source(s): accountant
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