I sell custom hand photos online - how do I properly pay taxes on this income?

Thanks for the detailed info! Do I need to register as a business or get any special licenses for selling hand photos? And about how much should I set aside from each sale for taxes?

You generally don't need to register as a business just for selling hand photos online - you can operate as a sole proprietor using your own name. However, if you want liability protection or plan to scale up significantly, you might consider forming an LLC, but that's probably not necessary when you're just starting out. For tax savings, a good rule of thumb is to set aside about 25-30% of your profits for taxes. This covers both self-employment tax (around 15.3%) and income tax. Your actual rate will depend on your total income from all sources and deductions, but this percentage gives you a safe buffer to avoid surprises at tax time.

Does it actually work with income from, um, "specialty" photo sales? I've been using CashApp and Venmo and I'm worried about how to report that income. Does taxr.ai help with that specific situation?

I'm kinda skeptical about AI tax tools. How does it compare to just using TurboTax or something? I sell crafts online and had a nightmare trying to figure out my taxes last year.

Yes, it absolutely helps with specialty photo income! It specifically has options for content creators and handles all payment methods including CashApp and Venmo. It walks you through exactly how to report that income, even if you don't receive 1099s from those platforms. For those comparing it to TurboTax, it's actually complementary - taxr.ai helps organize and identify your business income and deductions before you file. It's specifically designed for self-employed people and side hustlers who might not know all the tax rules. I still used TurboTax to file, but having my income and deductions properly organized made the process so much faster and gave me confidence I wasn't missing anything.

Wait, how does that even work? The IRS phone system is completely broken. I tried calling like 20 times about my 1099 income and kept getting disconnected.

This sounds like a scam tbh. Nobody can get through to the IRS. Are you saying they have some secret backdoor? Why would the IRS give special access to a random company?

It works by using their callback system that continuously redials and navigates the IRS phone tree for you. When they finally get through, they transfer the call directly to you. It's not a backdoor - they're just automating the frustrating process of constant redialing that most of us don't have time for. They don't have special access - they're just using technology to handle the most annoying part of reaching the IRS. I was super skeptical too, but it actually worked when nothing else did. I needed clarity on some self-employment tax questions specifically about online content sales, and the IRS agent I spoke with gave me exact guidance that I couldn't find anywhere online.

I hadn't even thought about sales tax! I'm in Florida - do you know if selling digital photos would require sales tax here? And is it different if the customers are from other states?

Florida does require sales tax on digital goods, so you would need to collect and remit sales tax from Florida customers. The current rate is 6% plus any local surtaxes that might apply to your county. For out-of-state customers, it gets more complicated. After the Supreme Court's South Dakota v. Wayfair decision, states can require out-of-state sellers to collect sales tax if they meet certain economic thresholds. But as a small seller, you probably won't meet those thresholds initially. Each state has different rules though, so if your business grows significantly, you'll want to check the requirements for states where you have a lot of customers.

Many platforms don't send 1099s unless you earn over $600 from them individually. Also, some use payment processors like PayPal, which have different reporting thresholds. But here's the important part: you still have to report ALL your income even without a 1099!

@Nasira Ibanez is absolutely right! The $3k you made definitely needs to be reported even without 1099s. The platforms probably didn t'send them because you didn t'hit their individual thresholds, but that doesn t'change your obligation to report the income. You should track down all your payment records from each platform - screenshots, payment app histories, whatever you have. Add it all up and report it as self-employment income on Schedule C. The IRS actually has records of electronic payments anyway, so it s'much better to report it voluntarily than have them find unreported income later. Don t'panic though - just make sure you report it correctly this year and you ll'be fine. You might owe some back taxes and interest, but being proactive about fixing it shows good faith.