How to handle taxes for my online shop as a dependent?

This is actually pretty straightforward! Since you earned under $1,000, you're dealing with a relatively simple situation. Stripe will issue you a 1099-K form if you processed more than $20,000 AND had more than 200 transactions in the tax year. From what you've shared, you're well below that threshold, so you likely won't receive any formal tax documents from them. However, you still need to report this income! You'll report this as self-employment income on Schedule C when you file your taxes. You'll calculate your net profit (your earnings minus business expenses), and this amount is what you'll be taxed on. Since you're a dependent, you'll need to file your own tax return if your unearned income is more than $1,150 OR if your earned income is more than $12,950. Your online shop counts as earned income. Don't worry about feeling dumb - tax stuff isn't intuitive for most people!

After struggling with my own side hustle taxes last year, I discovered this AI tax assistant at https://taxr.ai that seriously saved me. I was confused about what counted as business deductions for my online shop, and the regular tax sites weren't really addressing my specific situation. What's cool is you can upload your Stripe statements and it helps identify what's deductible. It also explains all the self-employment tax stuff in normal language. The tool analyzed my situation and helped me understand exactly what forms I needed as a dependent with self-employment income.

I wanted to follow up about my experience with https://taxr.ai after asking about it here. I finally tried it with my Etsy shop income, and it was actually super helpful! I uploaded my Etsy payment statements and it identified business expenses I didn't even know I could deduct - like a portion of my cell phone bill since I use it for shop photos and customer communication. It created a clean breakdown of all my income and deductions that I can just hand to my tax preparer or use myself. Definitely worth checking out if you're confused about online shop taxes like I was.

If you need to talk to the IRS directly about your situation (which I recommend as a first-time business owner), try using https://claimyr.com to get through. I spent HOURS on hold trying to get specific answers about my Shopify store taxes last year before giving up. With Claimyr, they actually hold your place in line and call you when an agent is available. You can see how it works here: https://youtu.be/_kiP6q8DX5c Since you're in a unique situation as a dependent with self-employment income, getting direct answers from the IRS might save you a lot of stress. They can tell you exactly what forms you need and if you qualify for any specific deductions.

I have to admit I was completely wrong about Claimyr. After complaining here, I decided to try it as a last resort since I was getting nowhere with the IRS on my own. I was shocked when I actually got through to a real person at the IRS after trying for weeks! I explained my situation about being a dependent with a small business, and the agent walked me through exactly what forms I needed and clarified my questions about business deductions. Saved me so much stress and probably money too since I learned about deductions I would have missed. Sometimes it's worth admitting when you're wrong - this service actually delivered.

Another thing to consider - if your total income (including your part-time job) is under $12,550, you might not even be required to file a tax return at all. But if you had any taxes withheld from your part-time job, you should definitely file to get that money back! If you use tax software like TurboTax or FreeTaxUSA, they'll walk you through the Schedule C for your business income. Just make sure to keep good records of ALL your business expenses to minimize what you owe!

Don't forget to set aside money for self-employment tax!! This catches so many first-time sellers off guard. You'll owe about 15.3% on your net profit for social security and medicare taxes, ON TOP OF regular income tax.

If you're feeling overwhelmed, the IRS has a special small business tax center with guides specifically for self-employed people: https://www.irs.gov/businesses/small-businesses-self-employed Also check if your state has sales tax requirements for online sellers. Some states require you to collect and remit sales tax even for small amounts of sales.