Need tax advice for my feet picture online business - how to properly pay taxes on income?

This is really helpful, thank you! Question though - do I need to register as a business with my state or get any special licenses for this type of work? Also, if I'm just using my regular phone camera and stuff I already own, can I still claim any expenses?

You generally don't need a special business license for digital content like this, but check your specific state requirements as some localities require business registration even for small sole proprietorships. It varies by location, so a quick check with your city/county website would be smart. Regarding expenses, yes you can still claim things you already own, but you have to depreciate their value based on business use. For example, if you use your phone 30% of the time for business, you can deduct 30% of new phone costs, phone bills, etc. Same with a portion of internet bills, and any apps or services you pay for to edit or distribute your content.

How does it work with calculating how much of my home expenses I can write off? I've heard mixed things about home office deductions.

Does it help with figuring out quarterly payments? That's what's confusing me the most with my candle selling business. I never know how much to send the IRS each quarter.

For home office deductions, it uses the simplified option (currently $5 per square foot up to 300 square feet) or helps you calculate the regular method which is based on the percentage of your home used for business. It asks good questions to make sure you're taking legitimate deductions - like if the space is used exclusively for business purposes. Yes, it has a quarterly tax calculator that estimates what you should pay each quarter based on your projected income. It's adaptive too, so if your income changes during the year (like your candle business has a big holiday season), it adjusts your next quarterly payment accordingly rather than just dividing your annual estimate by four.

Wait how does this actually work? Do they have some secret number to call or something? I've literally spent HOURS on hold with the IRS.

Yeah right, nobody gets through to the IRS that fast. This sounds like a scam to me. What are they doing that I can't do myself?

It's actually pretty straightforward - they use an automated system that navigates the IRS phone tree and waits on hold for you. When an agent actually answers, you get a call connecting you directly to them. No secret number - they're calling the same IRS lines everyone else does. They basically handle the most frustrating part - the waiting and navigating the confusing menu options. Once I got connected to the agent, I was able to get specific answers about tracking my digital content income that I couldn't find online. It's just a time-saver for when you need actual clarification from the IRS directly.

Do you happen to know if you can deduct your state income taxes from your federal taxes? I'm trying to figure that part out too for my online tutoring business.

You can deduct state income taxes on your federal return, but only if you itemize deductions on Schedule A rather than taking the standard deduction. With the higher standard deduction amounts in recent years (currently $13,850 for single filers), many people find that itemizing doesn't make financial sense anymore unless they have really high deductible expenses like mortgage interest, medical expenses, or charitable contributions. For your online tutoring business, state income taxes paid on business income aren't deductible as a business expense on Schedule C, only as an itemized deduction if you go that route.

Actually this is outdated info. The IRS delayed the $600 threshold again for 2024 taxes (filed in 2025). The threshold is still $20,000 AND 200 transactions for now. They keep pushing back implementing the lower threshold.