How hard will the Gov hit me on my new profits?

According to the Tax Code, you ARE running a business. If your gross receipts are more than $400 for the year you MUST file a return. If your net profit is more than $400 in a year, you WILL start paying self-employment tax (14.13% of the net profit due to how it's calculated) and if your profit exceeds $5,700 (in 2009 or 2010) since you are a dependent you will start paying income tax as well.

So, keep a close watch on your receipts and profits. Once you exceed $400 in profit, start setting aside 15% of the profits for the self-employment tax. Once you exceed $5,700 in profit, add another 10% of the profit beyond that to the 15% for the next $8,000 in profit. If it looks like you'll be owing more than $1,000 by the end of the year, start making estimated tax payments using Form 1040-EX.

If you get to the point where your profit is exceeding about $15,000 for the year, seriously consider a consultation with a tax pro (CPA or EA who specializes in small business support and taxes) to review your books and make sure that you are complying with the rules.

At the very least, you should download the following IRS Pubs and read up on running a business and the tax implications of doing so:

IRS Pub 334 http://www.irs.gov/pub/irs-pdf/p334.pdf Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ)

IRS Pub 535 http://www.irs.gov/pub/irs-pdf/p535.pdf Business Expenses

IRS Pub 583 http://www.irs.gov/pub/irs-pdf/p583.pdf Starting a Business & Keeping Records

IRS Pub 1518 http://www.irs.gov/pub/irs-pdf/p1518.pdf IRS Tax Calendar for Small Businesses and Self-Employed

Good luck in your venture. I hope that you make a TON of money at it!

You'll need to think about filing federal and state income taxes if you make more than $400 during 2009 from your self-employment selling candy. If you exceed the $400 threshold, the self employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance). You figure SE tax yourself using Schedule SE (Form 1040).

Hope this helps!

You need to keep track of how much you earn. You also need to keep receipts for your expenses. You need to file a schedule C when you earn $400 or more. You will also have to pay self employment taxes, social security and medicare, which is schedule SE. They run a little over 15%. You will have to pay state and federal taxes once your income passes the standard deduction. For 2009 the standard deduction is $5700.

with barely three weeks left of this month, your profit of maybe $300 is not going to stir up Washington

however, if you continue this into next year,you might want to consider keeping good records so that at year's end you will know what profit you have made

then you will report your business on a Sch C and will then pay se tax on Sch SE, you can see both these forms at www.irs.gov and while there request a publication 34 that will help you into 2010

You are probably already past the limit.

If you file taxes at all, then you must report all of your profits, even if they are only $1.

If your earnings from self-employment are at least $400, then you must file and must pay self-employment tax.