How to calculate earned income?

[turtleswares17]

Being that it's so similar to net profit has me confused, I've already calculated my net profit so what would be the exact calculated difference between the two if i am a self employed business, I've read earned income is business income minus expenses, and business income is total revenue minus operating costs and business expenses, but surely I'm not subtracting expenses twice as stated above. 

[pburn]

the difference between what? Between earned income and net profit? Why would you want to calculate the difference between the two?

Of course you can't subtract expenses twice. What are you trying to do? What's the end game here?

[dnasilver]

We suggest contacting a CPA before you try filing on your own.  You really do not want to be audited. Accounting let alone tax accounting cannot be taught in a matter of minutes let alone months. Hire a CPA who can set you up with accepted accounting practices and review your finances to determine the best way to handle monies from selling on eBay. Earned income you pay FICA and unearned income you do not. We have no idea why you are comparing net income to earned income. Best to consult with a CPA and save yourself headaches and money for years to come.

[powell-memorabilia]

Have you ever seen ‘Planes, Trains, and Automobiles?’  Remember “you’re going the wrong way!?”  That kind of sums up the past couple of days of “tax advice” and your resistance to getting help from a professional.

[theteamsetguy]

We can only lead a horse to water but can't make it drink it.

[dbfolks166mt]

      Unless you are doing full blown financial statements the difference is not really all that important but in a nutshell earnings are what you have after you deduct all expenses from your gross revenue. Profit is what is left after taxes and interest. 

[gosimus]

@turtleswares17 

< My taxes are done folks, I'm sorry all of you dont have the brains to do them yourself >   

I have no idea what kind of forms your tax preparation requires.  I hope you remembered to take your FICA tax into account, if necessary.  My tax preparer says that the FICA tax is the thing that most self preparers blunder. 

[downunder-61]

---

@turtleswares17 wrote:

My taxes are done folks, I'm sorry all of you dont have the brains to do them yourself but yet run entire businesses on eBay, I've only had 3 questions the ENTIRE process, it is not that hard really and it makes me laugh how much you people put doing it yourself on this high pedistal that nobody can reach. Maybe I should just be a CPA lmao. No more questions your welcome

---

Sorry, but this is very rude. You have asked 5 questions on this forum about doing your taxes, and I assume many of the responders have helped, so not sure why you would be laughing, but hoping your humour holds should you be audited.

[theteamsetguy]

I don't doubt you were able to complete the your taxes. Now did you take advantage of all of the deductions available to you so that you were able to reduce your tax liability to the lowest amount possible under the law. 

Every one's tax situation is different. Even IRS statistics indicate tax payers who use a professional pay less taxes on average than those who prepare their own taxes. In other words the DYI person misses deductions  more often than not.

[laststopgeneralstore]

It's extremely simple to calculate. Total revenue minus expenses = profit = income. It doesn't matter if you have a job as it all gets done at once. I lost money when I did my taxes and I did over 6-figures last year. Get yourself a good CPA & write as much off legally and what you're comfortable with. That being said I won't be writing that much off going forward as I am going to be buying a house and investing into other business's. Taxes are all a game at the end of the day. Essentially, within the lines of the IRS you choose how much you want to "make" when you have your own business. Don't worry about getting audited because the odds of that happening is less than you dieing from covid. If you have a job too and only resell for extra cash then write every single thing you possibly can off. I could go on and on lol. I'm not a CPA or giving any financial advise by any means but I did just do my taxes 2 days ago and this is exactly how it went. Cheers.