I sell custom hand photos online - what's the right way to pay taxes on this income?

Thanks so much for the detailed response! Question - for the business expenses, would things like manicures count since I'm specifically photographing hands? And do I need to register as an actual business or can I just file the Schedule C as an individual?

Manicures could potentially qualify as a business expense if they're specifically for your photo shoots and not personal use. Keep receipts and document when each manicure was for business purposes. The more evidence you have connecting it directly to income-generating activities, the better. You don't need to formally register a business to file Schedule C - you can operate as a sole proprietor using your social security number. That said, if your business grows, you might want to consider forming an LLC for liability protection, but that's not required for tax purposes.

Did it help with figuring out quarterly payments? That's what I'm struggling with for my online tutoring side gig.

I'm a little skeptical of AI tax tools. How does it compare to something like TurboTax for handling this kind of side income? I sell digital art and I'm worried about missing deductions.

It actually calculated my quarterly payment amounts and even sent reminders for when they were due. Super helpful because I would have totally forgotten otherwise! For digital art sellers, it worked way better than TurboTax for me. It caught deductions specific to digital creators that the general tax software missed, like partial internet costs and digital asset subscriptions. It's much more personalized to creative side hustles than the one-size-fits-all approach from the bigger tax software.

How exactly does this work? I'm confused how a third party service can get you through to the IRS faster when their phone lines are always jammed?

Sounds like a scam tbh. No way some random service can magically get you to the front of the IRS phone line when everyone else has to wait. And why would you need to talk to the IRS directly anyway when this info is all online?

It basically uses an automated system that continually redials and navigates the IRS phone tree until it gets a spot in line, then it calls you to connect you once it has a real person on the line. It's not cutting in front of anyone - it's just doing the waiting for you. I needed to talk directly to the IRS because my situation had some complications with marketplace sales vs direct sales that had conflicting information online. Getting a definitive answer from an actual IRS agent gave me peace of mind that I was filing correctly and wouldn't face penalties later.

Omg I totally didn't even think about state taxes! I'm in California - do you know if they have any special requirements for small online businesses?

California definitely has state income tax, and they're pretty thorough about collecting it! You'll need to report your income on your CA state tax return. California also technically requires a business license for most businesses, though many small online sellers operate without one initially. If your sales exceed $600 annually, you should register for a Seller's Permit with the California Department of Tax and Fee Administration, especially if you're selling any physical products alongside your digital content. For purely digital goods like photos, the rules can be a bit different, but it's still income that needs to be reported.

This is actually helpful tax advice for OP's question though? Maybe save the economic commentary for another thread.