Question of which version of turbotax to use

[tom m63]

Hello and thank you for your help. I have turbotax premier for this year's taxes. This will handle all of my family's needs. However, 1 family member (cannot be claimed as a dependant) has a small online business using Depop (think along the lines of eBay).  Her business is pretty straightforward: buy clothing at thrift stores and resell online. Her only expenses are gas, time spent, and shipping materials. Depop has provided her with a 1099 form which takes in account any refunds that occurred, sales tax, and selling fees. Pretty straightforward. 

question #1:   is whether I can use Premier for her business? She is not employed otherwise and made $40,000 gross last year doing depop. She has all her receipts for her purchases.

question #2:  she was not expecting to do so well in 2024, so she did not do quarterly estimated taxes. Will turbotax premier figure out her penalty?

question #3: will turbotax premier help us determine estimated quarterly taxes for 2025? or should we rely on form 1040ES to come up with estimates?

thank you for your help!!

[tom m63]

I should add another question. Can I upgrade my Premier to the small business version if needed?

[VolvoGirl · Accepted solution]

If you are using the Desktop installed program you can stay with Premier.   All the Desktop programs have the same forms. You just get more help and guidance in the higher versions.   But you can upgrade to Home & Business if you want.  There should be an upgrade button.  I think you can go up to Help-Upgrade.

Yes for your other questions.  Turbo Tax will figure any underpayment penalties and help prepare estimates.

Oh is she just a sole proprietor or self employed for it and Neil file on Schedule C in her personal return?  Or is she a Single Member LLC?   

[tom m63]

Thank you for your quick reply! She will probably need to file a schedule fee as well as a sole proprietor/self-employed as she meets these criteria:

• Your primary purpose for engaging in the activity is for income or profit.
• You are involved in the activity with continuity and regularity.

[VolvoGirl · Accepted solution]

“…file Schedule fee”?  You mean Schedule C?  Yes, sole proprietor/self employment etc. are all the same thing and are filed on Schedule C .    

You need to fill out schedule C for self employment business income and pay self employment tax in addition to regular income tax on it.  The SE tax is to pay Social Security and Medicare tax that wasn't taken out like on a W2.

You use your own name and ssn or business name and EIN if you have one.   You should say you use the Cash Accounting Method and all  income is at risk.  After you put in your income and expenses  if your net profit is $400 or more you will pay 15.3% for 2013  Self Employment tax in addition to your regular income tax.  The Schedule SE will be automatically filled out for it.

Here is some IRS reading material……

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business

http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses

http://www.irs.gov/pub/irs-pdf/p535.pdf

Turbo Tax Self Employed Tax Hub
https://turbotax.intuit.com/personal-taxes/self-employment-taxes

Turbo Tax Self Employment info
https://turbotax.intuit.com/tax-tips/self-employment-taxes/beginners-tax-guide-for-the-self-employed...

[tom m63]

Thank you! Yes schedule c (typo). Thank you for the additional documentation. Great job!