Business account to Personal account (Tax relate questions)
Hi,
I am currently operating ebay under my business. (Sole Proprietorship)
Technically I do not collect taxes in this business because eBay and other online platforms take care of all the taxes and I usually receive 1099 documentation by the tax season.
My concern at this point is that I understand that normal business owners must file sales taxes quarterly. I used to us CPA and pay to file 1040 documents while I was running a retail business. Since I am now all based on ebay, do i still need to file 1040 and file sales taxes quarterly? If ebay supports documentation under 1099 by the tax season, is it still necessary for me to report sales tax quarterly? How can I approach to file taxes yearly while being able to keep my business?
My business is currently registered at my residential house.
Q1. I would like to only keep my business to sell exclusively on ebay and other online platforms who will provide 1099 by the tax season. How can I keep my business and report sales tax yearly with supported documents?
Q2. If I start ebay with new by business EIN, will it be easier to start?
Q3. What is the best way to report taxes as a small business owner? Is there a way to report taxes yearly just with 1099 documents supplied?
Thank you for viewing my concerns. Hope you understand I at my best practice to overcome all obstacles and make an establishment through online websites. I've been at loss on every tax years and learning the importance of taxes. Appreciate much.
Best regards,
Gene Kim
rfmtm
·3 years agoIf you ebay account is already a business account, leave it alone. Open a separate personal account if you want to.
Sales Tax has nothing to do with your 1099, or income tax 1040. Although venues like ebay now collect it for you, most all states still require you to file a quarterly sale tax return, if you have a sales tax resale certificate for that state. You will owe no tax, but report your total gross sales and then deduct the total gross sales from the venues that collect the tax for you. You would only owe tax if you collected sales tax yourself, from say your own website sales.
At a Sole Proprietor you still file the standard 1040 tax return, but you now include Schedule "C" for each business you have revenue from a long with any additional form now required like for self-employment tax, etc. Depending on your previous return and your current expected income, you may be required to file estimated tax returns or pay a penalty at the end of the year.
Do no rely solely on any 1099, and remember it is only gross payments processed. It is not gross sales and does not reflect any refunds or deductions for expenses. You must have you own accounting for that, although ebay and others do provide a detailed report you can sort and subtotal that covers anything transacted on their website.
Get help from a tax expert that is familiar with online sales, or at the very least use a good tax program like Turbo Tax or H&R Block, which will guide your through this and has specific instructions and help for reporting online sales.
phonerepairus
OP3 years agoThank you for your advice! 😀
dbfolks166mt
·3 years agoThis is something you need to re-engage your CPA or a tax professional to discuss and get setup. Not that you would require them to do your taxes but they can provide you direction on handling your taxes, record keeping and the pro's and con's of either filing a single return or filing separate returns one personal and one business.
stainlessenginecovers
·3 years agoLeave as a business. I been doing business here since 2011, over 100k a year. I file and pay taxes at the end of the year. I usually owe around $20k. I pay $200 'fine' for only paying once a year. It is NOT worth it for me to 'figure & file taxes quarterly', so I don't. I do, sometimes, pay about half of what I think I'll owe in September, can do it online, 'estimated tax' for the 'coming year and don't have to 'file any paperwork'. Just give money, just like a job paycheck does (your 'boss' has to do it quarterly if they are collecting on behalf of others (eimployees) but it is NOT required to do for Sole Proprietor with no employees.
phonerepairus
OP3 years agoThank you for your advice! ðŸ˜