I have a small business on eBay, this is my first year, how do I go about preparing for taxes?

3 Comments

1. MukatA says:

   July 11, 2010 at 5:49 pm

   1. Your income is self-employment income. On your tax return it is to be reported on Schedule C of Form 1040.

   2. You must keep track of your gross sales and expenses to figure out net profit. This net profit is subject to Self Employment tax @15.3%. For this you will file schedule SE (Form 1040) with your Form 1040.

   3. Get a business license from your city/county. The fee ranges from $10 to $100 depending upon your city/county.

   4. Open a bank account exclusively for your business activity. This way you can easily keep your personal and business expenses separate.

   5. If you don’t have any employee you don’t need tax identification number. Your SS number will serve this purpose.

   6. From your city/county office, find out if you are required to get sales tax permit. When you get sales tax permit, then you will add sales tax to items sold in your state, and deposit the collected sales tax with the sales tax office.
2. roxyboots200 says:

   July 11, 2010 at 5:49 pm

   Hi
   What you should do is open a business checking account at a bank. They automatically take all the taxes out that you need for the tax season. You made $1,000 in profit? Thats good. Were did you get the stuff to sell on eBay? What you do is when it’s tax time all you have to do is go to the bank and get all your business account papers from your bank and bring it to H&R block and they can figure it out for you.
3. Judy says:

   July 11, 2010 at 5:49 pm

   You’ll need to have good records of your income and of the expenses for making that income. If you buy an item and resell it, the amount you paid for it is an expense – also ebay fees, packaging materials, shipping fees….

   Good luck.