Is it true that when selling things online, I only have to file sales tax on clients from my own state only?

Question

But clients of other state I dont have to file for state taxes? And how do I file my taxes for these incomes? Are all the REVENUES considered as personal income or only those that are profits after all the expenses being deducted? thx

Answer 1

The determination of sales tax depends on where you ship the item rather than where the buyer is located. If you are in NY, for instance, and a NY person purchases an item online to send to Pennsylvania, then there is no sales tax as the item is being used in PA. However, if the buyer is in PA and purchases an item on line to ship to NY, where your business is located, then they must pay NY sales tax.

You need to maintain a set of books that keeps track of all of the revenue received from the business and all of the expenses associated with the business. Be sure to take things like paper, stamps, internet access, etc. into consideration when booking expense. You want to have as much in legitimate expenses as possible and not to miss any. The expenses are deducted from the revenue to come to a profit. This is reported to the IRS on your Form 1040, Schedule C. It will show the revenue portion and the various expenses and the bottom line profit or loss that will carry forward to be included with your personal income. That is what you will pay income tax on.

Answer 2

Sales tax. correct - you only collect sales tax from residents of your own state. You'll remit all of the tax you collect to your state on whatever schedule they require.

For INCOME tax though, you report and pay taxes on ALL of your income. When you fill out your schedule C on your tax return, you will show all of your revenue, then any deductible expenses, then calculate your net income - that's what you'll pay income tax on.

Answer 3

you do not could desire to gather sales tax. you may desire to checklist any earnings you're making as earnings on your earnings taxes. earnings is what you're making in case you sell an merchandise for greater advantageous than you paid for it. that doesn't observe on your case.