do i have to pay taxes on a online clothing store ?
S.S. asked:
im thinking about opening a online clothing store.. im thinking about importing the cloths from my home country.. i need to know if i have to pay income tax and business taxes.. and is there a way avoid taxes?
Tags: Business Taxes, Income Tax, Online Clothing
March 5th, 2009 at 7:14 pm
Yes, you must pay taxes. There are ways to avoid taxes in some situations, but not this one.
1. When the store sells to a person in the same state as the store, the store must collect sales tax from that person and must send that tax money to the state.
2. When you import the clothes from your home country, you must pay whatever tariffs, customs duties, etc., apply to clothing imports from that country.
3. If you make a profit, then that amount must be included in the determination of how much you pay in income tax or receive in income tax refunds.
4. If you make more than $400, you may also be required to pay self-employment tax.