Tailmaker here. Taxes?

[MerQueen Nerissa]

Not sure if this is in the right place.
But, since my business is taking off and I am making a good amount of money, I'm wondering how taxes work. I currently use both PayPal and Etsy, and im fairly sure everything is under the table, unless Etsy and PayPal fees cover that, which I doubt.


So I'm wondering, at what point do I need to pay taxes for the money I'm making? Should I have done that already? What is the process for this? I'm not sure what or where to look into for this, any help/advice is appreciated!!


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[deepblue]

I recently looked into this for myself. You are basically an independent contractor, and there is a limit on how much income you can make before you have to pay taxes. Have you looked at this page? Taxes 101 for Etsy Sellers (https://www.etsy.com/seller-handbook/article/taxes-101-for-etsy-sellers/22721885775)

[PearlieMae]

Go to IRS.gov and look into filing a 1099 return - it's what freelancers and independent contractors use. That is, if you haven't incorporated yourself (either corporation or LLC). Chances are at this point you are an independent contractor/sole proprietor. All your income is seen as personal income. You'll have to file a 1099 Schedlue C (I think) in order to deduct your business costs from your income.

The Etsy link above should get you started in the right direction, too.

DON'T mess around with avoiding taxes! The penalties are STAGGERING.

[Dancing Fish]

And don't forget sales tax. You still have to file them even if you don't need to collect them. For MOST states, you only need to collect sales tax on your internet sales if you are selling to someone in your state. Out of state buyers are supposed to record their internet purchases and pay their own sales tax on them (haha). In my state (PA), two major counties also collect separate sales taxes, and my local township also collects a small "business privilege fee" on all my sales (grr). Your state.gov website should have a link to small business related concerns, including taxes.

You can do your own taxes pretty easily, but I found an hour consultation with a tax attorney was incredibly helpful to make sure I was doing them correctly. The 1099 form is awfully inexplicable the first time around!

[AniaR]

Joseph McGarry is a guy on FB who we had come in to mermania and do a talk about taxes for mermaids. If you look him up and shoot him a message he'll email you a cheat sheet!