I have a question about taxes and small business. I recently began my own side business where I sell items on eBay for people and receive a small percentage of the sale price for doing so. the business is seeming to pick up and I am not sure if this is something I need to file with the IRS and also, if I should apply for a tax ID number, etc.
Any and all help in this area would be appreciated. I have heard that I should file because of the write-off opportunity and I have also heard that I don't have to.
I just want to do what is right and beneficial.
Please advise.
You should file the taxes . Small businesses with sales of under $5 million can opt for cash or accrual. The cash method reports income in the tax year it's received, while expenses are deducted in the tax year they are paid. Accrual for production , sell or purchase . It requires income be reported in the tax year it is earned and expenses deducted in the tax year they are incurred
Yes, You are required to have sales tax vendor id number or also called sate id number to collect sales tax on selling goods. If you are doing business under your personal name then your are not required to create a dba but if you are doing business other than your personal name then yes, you are required to either incorporate your business or create a dba (doing business as).
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