ANSWERS: 3
  • YES! If you have anything the IRS can point at and scream "BUSINESS!!," they're going to audit you and take all of your money. And put you in the cell with Bubba. If you even transfer two-thousand dollar from one account to another, the IRS jumps on you for running an under-table-business. If there's ANY shadow of a doubt you're running a business, they'll assume you do and make you prove otherwise in front of their attorneys. Take the warning. Sell at swap meets. Wear a ski mask.
  • It depends where you live. In my state (California), you need a business license if you make over a certain amount.. not sure what that amount is or what the laws are in other states/countries.
  • If you are making things and selling them on a website you just need to keep very good records and you will pay your income tax as an individual, unless you have incorporated or formed a partnership with someone else. If you use Turbo Tax it should be quite easy as your earnings from your website will be self employed income and you will pay self employment tax. You will be able to take certain deductions but I know very little about that. I have found Turbo Tax to be very easy and it guides through the possible deductions. If you go on the IRS website you can download publications and I'm sure there is one for small businesses. I don't really know, but my guess is you may need a business license in your city. You should be able to find out easy by making phone calls.

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