Sole Proprietor how should i file and add reciepts?

[Kelseywill]

Hello everyone ,

I have Sole Proprietorship for my small doll business . It just me painting and selling the dolls no other employees .However i do have a regular 8-5 Security job as well. How should i file to account for both ?

Also i have expenses for the dolls such as buying supplies ,clothes  , using my cell , shipping etc how do i write those off ?  I donated a doll to an Museum for a year ,do i need to do anything with that ? 

Lastly i have been paying quaterly taxes ,federal estimate personal payments ,and sales and use tax under my SSN number . Do i have to do anything to show i have paid , or will it automatically be attached to my SSN ?

Thank you in advance 

[VolvoGirl · Accepted solution]

You will file a Schedule C in your personal 1040 return.  Some general info on self employment on Schedule C.......

You will need to keep good records. You may get a 1099NEC or 1099K at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small. You might want to use Quicken or QuickBooks to keep track of your income and expenses.

There is a QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed return....
https://quickbooks.intuit.com/self-employed

When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax. You will need to use the Online Premium or Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

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

Here is some IRS reading material……
IRS information on Self Employment
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

Publication 334, Tax Guide for Small Business
https://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses
https://www.irs.gov/pub/irs-pdf/p535.pdf

You pay Self Employment tax on $400 or more of net profit from self-employment in addition to any regular income tax. You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400. The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire.

You will need to enter the quarterly estimated payments into your return to get credit for them.    And the sales tax you paid can be a deduction on schedule C.  

I assume you buy the dolls?  Those can go under Supplies.  You don't enter the donated doll.  You will just deduct the cost as an expense.  

Here is  Schedule C to see how it works and the expenses categories to use.

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf 

[VolvoGirl]

Oh are you filling out your 2022 return?   If you get stuck just ask.  

Just enter your gross self employment income as Other self employment income or as Cash or General income. You don't need to get a 1099NEC or 1099K. Even if you did you can enter all your income as Cash. Only the total goes to schedule C.

How to enter income from Self Employment
https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

[Kelseywill]

Thank you for the reply !  I will take my time to look over everything and visit all the links. I have been keeping records since the beginning of the year ,until now. I have all of my receipts etc but i will look into the quick books. I was going to try to make a spread sheet myself ,but that would help. I do purchase the blank kits to paint as well as polyfil , glass beads for weighing ,hair and rooting needles  ,magnets for pacifiers ,paint, paint brushes , jars for holding the paint ( just to name a few   things) . I also have a separate bank account so i can easily see purchases made for the things i need.