# Single person business and Federal Tax



## DigitalInkArts (Jul 20, 2011)

I have a New York State tax id. I have no employees and I do have a DBA. I have declared myself a business 3 months ago. What Federal forms will I need to file? I was reading there was also a way to estimate , But I do not think I want to do that.

I had one customer tell me I can not charge tax on labor. Is this true because I dont get it? Don't auto shops charge tax on labor?

Also. I know you need to keep receipts. But what happens If I am buying things on Ebay? I do not get a receipt. Im not even charged tax. I do a lot of vinyl work and Buy it off Ebay. 

Sorry for multiple questions. I have been reading archives and typing things in to search, But I wasnt finding what I wanted to know.


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## thelogobiz (Jun 10, 2011)

You can sale to anyone in another state and not charge sales tax, phone orders, internetsales, "interstate commerce" only your customers in your state you have to charge sales tax. as for sales tax on labor, HMMM, is your customer a CPA. that is a fine line, a service like lawn care or building a house I would agree no sales tax would be charged, but being that you are creating a product "manufacturing" if you will, than it is a product and it should be taxed. a baker has to charge tax on the bread or cake that he makes! good luck with your business.


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## DigitalInkArts (Jul 20, 2011)

Great , Thanks for the Info. What forms do you file for Federal? Are you a single owner, no employees? If I need help I pay people I know for the help. As long as i can do that and they are happy making extra cash, Then I am happy! I just dont know what I should do for Fed.


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## greyhorsewoman (Jul 19, 2007)

Sales tax laws differ from state to state ... you really need to check with NY to see what is taxable. Labor is taxable in some states ... clothing is not in others. Each state defines what is and is not taxable. You may want to consider a consultation with a CPA or accountant, since getting tax information on a shirt forum probably isn't the most reliable way to go about it. 

BUT to get you started ~~ you are currently a 'sole proprietor.' You will need to file a Schedule C at the end of the year along with your other tax forms. I've used Turbo Tax with great success, but I was a bookkeeper in another lifetime. It may not be necessary to pay any estimated tax initially, since you probably won't have a lot of profit your first year. You can claim money paid to non-employees up to a certain amount. Again, just log everything. When tax time comes, take it to your CPA, accountant, or use with a tax program. 

You should set up some accounting system NOW. Quicken is nice, easy and not expensive ... or QuickBooks if you want something more intense. Even a spreadsheet will help when tax time comes around. Log ALL income and expenses. You DO get receipts on Ebay purchases, just print out the details of the purchase. 

When you purchase items used in the making of your product, it is 'cost of goods sold' and generally not taxable as you will collect tax at the time YOU sale the finished product. However, equipment and supplies purchased without paying sales tax should be reported on your sales tax return as 'use tax.' While it is difficult for states to track this, failure to ever claim any use tax is a sure red flag to a possible audit.


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## DigitalInkArts (Jul 20, 2011)

I use Turbo every year, So I will look in to that when the time comes. I have just started using Quick books a month ago. Little difficult to grasp, But I am learning it slowly. I guess I am on the right track according to your tips. Thanks a lot! I have earned 7,000 in the first 3 months.
( of legally being a business ) I make signs, Vinyl graphics, Photography and just started screen printing. So I am getting worried and want everything documented and smooooth.


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## greyhorsewoman (Jul 19, 2007)

If you already use Turbo Tax, you will just have to purchase the one for BUSINESS this year. It takes you step-by-step through all the steps. Filing a sole proprietorship on a small business is not that complicated. Good luck~!!!


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