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Do I have to pay taxes on money I make as a minor?
I’m 17 years old i I sell stuff on places like Depop, poshmark etc and I make abt 1,000 $ a month. Usually the apps take like “state taxes” but are there other taxes I need to be paying? Like where I would have to submit something to the government? I know I don’t make that much money but I still want to make sure I’m not doing anything illegal. Also I don’t have a real job this is the only money I’m actually making (just selling my old clothes and art I make)
- Christin KLv 71 month ago
Simple answer: yes, you have to pay tax on your earnings if you're earning that much money every month. There's a minimum amount you need to make before you are required to file tax forms, which can all be found on irs.gov.
- AmyLv 71 month ago
Yes, you owe tax. In fact your tax forms might be very complicated.
You probably don't earn enough to owe federal income tax. But income from labor is also subject to social security tax. You'll need to add up your revenue and subtract expenses to calculate the profit of your "business".
On the other hand, "unearned" income such as a profit on buying and re-selling things, is not subject to the standard deduction for a dependent.
(This law was written to prevent parents from hiding income by putting it in their children's name)
Other than being a dependent, your age doesn't matter.
- StephenWeinsteinLv 71 month ago
Yes. The app is talking about sales tax. You also have to pay self-employment tax and may have to pay income tax.
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- STEVEN FLv 71 month ago
US Federal income tax law doesn't have a minimum age. If you earn money as a 2 year old, it is taxable.
- babyboomer1001Lv 71 month ago
Yes, you have to declare your income. If you babysat and earned $30 or $50 a week, you wouldn't have to declare it but you are earning a significant amount of money. You must declare it.
- A HunchLv 71 month ago
If you are selling your old clothes for less than you purchased them for - there is no taxes due (i.e. like an online garage sale).
- However, you may get tax documents from the 3rd parties that you sell from so you need to keep records of purchase price & sales price.
If you are selling your clothes for a "profit", then there is taxes involved.
Also, your art is going to be "profit" minus any expenses you have, so there will be taxes there also.
You will need to pay federal taxes, if you make over $400 a year in profit
Depending on the state and local jurisdiction rules:
- You need to pay state taxes, if your state has an income tax.
- You will need to pay sales tax, if you state has one and you meet the requirements for this (this would be on in state sales only at this time because of the amount you sale is not much, on the art and clothes if you are selling for a profit).
- You may need a business license
Congrats. Seems like you are doing pretty well!
- SlickterpLv 71 month ago
State and federal. You pay them because there is no age limit on income tax. You must file a tax return.
- Anonymous1 month ago
Sorry to break the news, but you already are doing something illegal. You owe federal self-employment tax (15.3%) of all profit over $400 in a calendar year. You also may or may not owe some federal income tax.
You would file a 1040 Schedule C and a 1040 Schedule SE and a 1040.
You are supposed to make quarterly estimated tax payments throughout the year.
- David KLv 61 month ago
If you're a dependent on someone else's income tax, such as your parents, and earn over $12,400, then you should file a return. You can do that online for free. I encourage you to file one anyway so that you have a record of this.