I have online sales, which for 2022, will be > $600 for the year.
I want to add my income and expenses from my online sales in Turbo Tax.
Can I do that with the normal Turbo Tax, or do I need to purchase a different Turbo Tax for business.
Do I need an EIN number or a State tax number?
Does Turbo Tax has a list of expenses I can deduct for a sole proprietorship?
Is the sole proprietorship the easiest way to report online sales?
I plan on earnings between 5k - 10k.
Thank you.
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Hi!
Congratulations on your new business. As a sole proprietor that has not made any elections to be taxed differently, you will report your business income and expenses on Schedule C as part of your personal income tax return. You can use TurboTax Self-Employed (if using TurboTax Online) or TurboTax Home and Business if using the desktop software. You may want to consider using TurboTax Full Service your first year. Here is some more information about that offering.
TurboTax has LOTS of information to help the self-employed. Here is a great place to start. One important thing to be aware of is self employment taxes. Many people are not aware that they pay not only federal and state income taxes, but also self-employment taxes (and send in quarterly estimated tax payments). Here is a great article to get you started.
You may wish to get an EIN but may not be required to do so (you would be required if you have employees and other certain other circumstances). Here is some info on that.
As to registering with the state, that's state specific and is generally required if you have a DBA (Doing Business As) name. Here is some info on that, and you may want to check in with your state's secretary of state website for more info. Your local Small Business Administration can be a great resource to help you learn more and stay out of trouble.
Best of luck on your new venture! Cheer below if this was helpful!
Karen
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