Selling on Poshmark

[Rmjl]

Just starting selling on Poshmark and will receive their tax form to file.  Selling used clothing and household items. Question is whether I need to register as a solo business owner with the state of FL.  Also,  will I be able to deduct expenses such as supplies to ship purchases.  I am 61 and on Social Security and have no other income.  Thank you.

[mtran7]

Hello, Rmjl!

You will need to file the tax form on your individual tax return 1040, on a Sch C. You will be able to use this form to claim the income and related expenses.  Keep in mind that this income is untaxed and depending on how much you make you may owe taxes on your federal tax return.  Here is a link to our tax calculator so you can get an idea of what you might need to set aside for taxes. 

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

Here is a link to Florida Small Business resource guide where you can find out guidelines specific to Florida, but typically for this type of business you would not need to register with the state.  https://dos.myflorida.com/library-archives/business/

I hope this helps!

[Esther M]

Dear Rmjl,

Thank you for your question, we're here to help. Since you started selling on Poshmark by yourself and will be getting tax form from Poshmark, you're considered a Sole Proprietor for tax purposes and you will be filing a Schedule C with your personal taxes.  That means you're Self-employed. A Sole Proprietor is a self-employed individual.  A Schedule C is the tax form that sole proprietors use to report their income and expenses to the IRS. Yes , you will be able to deduct all your business expenses. Only your net profit will be taxed. Click here to learn more about Self-Employment. Am I Self-employed? 

I do not know whether you will need to register with the Florida State as a business owner but Florida does not have state tax requirement for individuals i.e. Individuals do not file Florida State taxes. Please go to Florida Dept of Revenue here   Florida Dept of Revenue  to find out what is required of you.

[Leta_W]

This activity will require you to use a Schedule C on your tax return. You do not need to register with the state of Florida unless you wish to be a sole proprietor Limited Liability Corporation (LLC). 

Below is the link to the Florida website to register to be a LLC if you choose to do so.

https://www.floridaregisteredagent.com/state-landing-page/?gclid=CjwKCAjw67ajBhAVEiwA2g_jEB7w6NsTdGL...

Schedule C net income (income less expenses) will be your taxable amount for self employment tax. Self employment net income tax is 15% (7.65% is personal tax; 7.65% is matched as a business deduction).

You may or may not owe tax federal income; but, you will always pay self employment tax unless you have a loss on your Schedule C.

I am giving you a link to test what your tax liability might be at the end of the year. You will be able to include your social security income in this tax projections.

https://turbotax.intuit.com/tax-tools/

Please look at a Schedule C and become acquainted with the categories to track during the year.

https://www.irs.gov/forms-pubs/about-schedule-c-form-1040#:~:text=Use%20Schedule%20C%20(Form%201040,....