How do I file taxes as self-employed?

[jacklyn_of_all_trades]

Hi, for the past year I have been buying and selling stuff online "for fun" but in the last couple of months I found a really good product source and my "hobby" has become very profitable and now I feel like I really should be claiming my income. I am kind of intimidated by the whole thing and don't know where to start. I saved my receipts and stuff for October until now (that is about when things started to make money.) I thought about getting a business license but it just doesn't seem necessary since I do not have any employees. Its just me.

[honeyalmondcandlefreak]

If you make over $1200 in Missouri, you have to claim your income. Especially if you can trace the money i.e. paypal transactions, checks.
But what you need to do is file a 1099. Look up info on 1099. If you aren't sure what to do, you can always call the irs or go to your local HR Block. They will help you. HR Block will charge, I think. But you can always call and ask.
I used to own my own cleaning business and had to claim on 1099s. But because my husband claimed the most he could, I did not have to worry about the taxes because he paid enough in to cover my taxes as well as his.
So the best bet would be to call the IRS or HR Block. They will tell you exactly what to do.

I'm sorry, the form you need is called a Schedule SE not a 1099 but if you look up 1099 you will still get info on unemployment.

Below are some websites that I thought could help you.

[Judy]

You'll file a schedule C to show your income and expenses, a schedule SE to calculate your self employment tax for social security and medicare, and a form 1040 to tie it all together. You'd be wise to talk to a CPA or Enrolled Agent to find out what kind of records you should keep and what you can deduct, and maybe have that person prepare your return at least the first year.

[Charles G]

If you are making a profit, you should file Sch-C to put your income and expenses on. If it is a hobby (not run to make a profit), you put your hobby income on Misc Income on 1040, and expenses on Sch-A.

If you are confused, get a good book or see a tax professional.

[xtraheavy01]

jacklyn_of_all_trades,

As a self employed person you need to report your income and expenses on Forms 1040 Schedule C and Schedule SE.
Since most of the year is past, you can wait and see where your net income is before you need to pay estimated taxes for the new year
using form 1040ES and your respective state.

If you have a lot of transactions to report, you may want to purchase Quickbooks software or use a spreadsheet to accumulate your sales and costs and other operating expenses

Take a look at Schedule C. It breaks down what you need to report

You may have

Sales

Cost of Sales

Amounts you paid for Purchases
Shipping Costs
less: Ending Inventory (If you have any hoods you purchased that you have not sold at year end)

You would record your inventory at what you paid for it.

You would then have

Sales less Cost of Sales which will equal your profit.

You may have operating expenses:

Cell Phone usage
Office suppliesinternett usage
Computer repairs.

After you apply your operating expenses you have net income

You should set aside at least 40 percent for taxes.