Question how do i claim my income on an ecommerce account?
Do I need to pay taxes for this income separately?
how often? do I need to have a registered company?
Answer There is a place for "Other Income" on the tax forms.
The form tells you what schedule to attach, which is simply another form.
If you have been selling things in the state where you reside, you were supposed to have collected sales tax, which you would also be required to send in. If you have been referring people to other websites as an affiliate and they actually do the selling and pay you a percentage, you do not have this problem. They are supposed to send you a 1099 to help you claim this on your tax return.
People who buy things on line are responsible for paying sales tax in their own states, but State tax laws concerning sales tax have been changing rapidly and you may owe sales tax to other states.
You can make yourself legal by getting a simple dba business license from your local city hall for about $100. While states and communities usually do not bother with small online businesses, if you sold a lot, you may get their attention when your bank account transactions are reported to the IRS next month or when you file your taxes.
I am not an attorney or an accountant so do not take the above opinion based on personal experience as legal or financial advice. To make sure that you are protected under the law you should consult with an attorney or certified accountant.
