I sell gift cards online but never considered it a business, what do I do?

Forum|Forum|7 years ago
April 11, 2019
1 reply
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A few months ago I started selling gift cards online. I've made about $7k so far, around $2k profit. I never considered this a business, I'm 17 and do this just to make some money. I use paypal personal account, transfer to a personal bank, and withdraw to cash. Do I have to do taxes on that? How much would my taxes be? I'm scared and confused.

LudwigVan_fan

Employee

Yes, you do have to file a tax return. You also need to include a Sch C with the 1040, and if you made over $400 in net profit (you said $2,000 net), you will have to pay self-employment tax on the net profit as well.

You said you started a few months ago...was it all in 2019? Start in 2018? If started in 2018, you need to sort your income and expenses by when received and expenses between 2018 and 2019. IF the income is small enough for 2018, and you don't meet any other filing requirement (I'm assuming at age 17, you would be a dependent), you may not have to file for 2018. However, that all depends on the income and expense in 2018 and any other income you may have.

See Table 3 in the link below

https://taxmap.irs.gov/taxmap/pubs/p501-000.htm#TXMP7ee7239a

Information about Sch C

https://www.irs.gov/forms-pubs/about-schedule-c-form-1040

Information about Self-Employment

https://taxmap.irs.gov/taxmap/ts0/selfemploymenttax_o_31fa360e.htm

**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**