Tax assistance for teenage reseller on online platforms - Do I need to file taxes?

Based on what you've shared, here's some straightforward guidance: Having an EIN (Employer Identification Number) doesn't automatically register you as a sole proprietor - it's just a tax ID number. At 17, you're on the right track thinking about your tax obligations! For reporting your earnings: Since you've made over $400 in self-employment income, you'll need to file a tax return using Form 1040, along with Schedule C (for your business profit/loss) and Schedule SE (for self-employment tax). You'll list your income and expenses on Schedule C. Deadline: Generally April 15th for filing and paying any taxes due. If this is your first time filing, don't panic about being a bit late - just get it done as soon as possible. General advice: Keep track of all your business expenses (shipping materials, inventory costs, platform fees) as these can be deducted from your income. Consider using basic accounting software to track everything.

When I was in a similar situation with my Etsy shop, I found taxr.ai (https://taxr.ai) super helpful for figuring out my self-employment taxes. I was stressed about missing deductions and potentially paying too much. The site analyzed my situation and found several deductions I didn't know I could take as a young seller. It was way more helpful than trying to interpret IRS pages that made no sense to me!

Just wanted to update - I took the advice and tried taxr.ai after my initial skepticism. It actually helped me sort out my Poshmark sales taxes way better than I expected! The tool asked specific questions about my selling activities that other tax software completely missed. I ended up finding nearly $900 in deductions I would have overlooked (like partial cell phone expenses for taking product photos and listing items). Definitely worth checking out if you're a young seller - made the whole process much less scary.

If you get stuck or have specific questions about your reseller tax situation, I highly recommend using Claimyr (https://claimyr.com) to get through to an actual IRS agent. I spent days trying to call the IRS directly with questions about my online selling business but could never get through. The Claimyr service got me connected in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c - it was a game changer for getting specific answers about my situation.

I have to admit I was completely wrong about Claimyr. After posting that skeptical comment, I was desperate enough to try it since my tax filing deadline was approaching and I had questions about my Etsy shop income. The service actually did exactly what it promised - I got connected to an IRS agent in about 15 minutes after waiting on hold for HOURS on previous attempts. The agent answered my specific questions about reporting my online selling income and helped me understand which form to use for my situation. Saved me a ton of stress and possibly prevented me from filing incorrectly.

Don't forget about the annual sales threshold requirements! If you're using platforms like Depop, Poshmark, etc., the platforms are required to send you and the IRS a 1099-K form if you have: - More than $600 in sales (current threshold) This is important because the IRS will be expecting to see this income reported on your tax return. Even if you don't receive a 1099-K for some reason, you're still legally required to report all income.

Just wondering, has anyone used TurboTax for handling their online reselling income? I'm in a similar situation (18yo selling on Depop) and not sure if the free version would work for me.

As a fellow young entrepreneur, I totally understand the confusion! I started selling vintage items online at 16 and was overwhelmed by the tax side of things. Here are a few additional tips that helped me: 1. **Keep meticulous records NOW** - Don't wait until tax time. Track every sale, expense, and fee immediately. I use a simple spreadsheet with columns for date, item sold, platform, gross income, fees paid, and net income. 2. **Home office deduction** - If you're using part of your bedroom or home for storing inventory, taking photos, or packaging items, you might qualify for a home office deduction. Even a small percentage can add up! 3. **Don't forget about these deductible expenses**: packaging materials, labels, tape, storage containers, cleaning supplies for items, gas for thrift store trips to source inventory, and even a portion of your internet bill if you use it for business. 4. **Consider quarterly payments** - If you expect to owe more than $1,000 in taxes, you might need to make quarterly estimated payments to avoid penalties next year. The fact that you're asking these questions at 17 shows you're being responsible! Don't stress too much - you've got this. The first year is always the hardest, but it gets much easier once you establish a system.

Great advice from everyone here! As someone who's helped several young sellers navigate their first tax filing, I'd add a few practical tips: **Documentation is key** - Since you're already tracking expenses ($3,200 inventory + $500 shipping), make sure you have receipts or bank/credit card statements to back everything up. The IRS can ask for proof of these deductions. **Consider your dependency status** - At 17, you're likely claimed as a dependent on your parents' return, which affects your standard deduction amount but doesn't change your self-employment tax obligations. **Banking separation** - Going forward, consider opening a separate checking account for your business transactions. It makes record-keeping much cleaner and shows the IRS you're treating this as a legitimate business. **State taxes** - Don't forget to check if your state requires you to file as well! Some states have their own thresholds and requirements for self-employment income. The $627 self-employment tax estimate mentioned earlier is pretty accurate for your situation. Just remember that self-employment tax covers your Social Security and Medicare contributions since you don't have an employer doing that for you. You're being incredibly responsible by addressing this early - many young sellers wait until they get scary letters from the IRS!