Question for tax experts

So if you have a home business you do that doesn't take out taxes but you need to report your income on your taxes......what percentage of what you made will you owe and will it just be deducted from your tax return or will it have to come out of pocket? These are digital sales so I can't deduct and expenses since the items are not shipped.

I will be going to H&R block about it but want an idea of what to expect to pay.

<blockquote><b>Quoting Expecting Emma:</b>" So if you have a home business you do that doesn't take out taxes but you need to report your income ... [snip!] ... expenses since the items are not shipped. I will be going to H&R block about it but want an idea of what to expect to pay."</blockquote>




It depends on your state and your overall income. Also, a BIG factor that you must consider is your deductible business expenses.

Have you started using a bookkeeping program like quick books?

Quoting TheNuge:" <blockquote><b>Quoting Expecting Emma:</b>" So if you have a home business you do that ... [snip!] ... that you must consider is your deductible business expenses. Have you started using a bookkeeping program like quick books?"

The thing is I don't have business expenses. It's all done digitally. I don't ship anything.

<blockquote><b>Quoting Expecting Emma:</b>" The thing is I don't have business expenses. It's all done digitally. I don't ship anything."</blockquote>




Expenses:
Marketing and advertising
Internet fees
Research
Phone
Consultants
Office expenses

What kind of business do you own?

Quoting TheNuge:" <blockquote><b>Quoting Expecting Emma:</b>" The thing is I don't have business expenses. ... [snip!] ... Expenses: Marketing and advertising Internet fees Research Phone Consultants Office expenses What kind of business do you own?"

I sell printable invitations and party supplies on Etsy. The only expenses I can think of would be I have an Etsy bill every month for listing fees, advertising fees. But that would be it. That could be counted?

Thanks for your input by the way : D

<blockquote><b>Quoting Expecting Emma:</b>" I sell printable invitations and party supplies on Etsy. The only expenses I can think of would be I ... [snip!] ... month for listing fees, advertising fees. But that would be it. That could be counted? Thanks for your input by the way : D"</blockquote>




Yup.
Etsy fees, your monthly Internet costs, and computers and printers, any phones and a portion of your phone bill.
The fee you paid to HR Block last year is a professional/consultant fee is deductible.
Your tax prep person will ask you to add those fees up.

If you are married and filing jointly, your husbands income will impact what you owe or what you have due as a refund.

Quoting TheNuge:" <blockquote><b>Quoting Expecting Emma:</b>" I sell printable invitations and party ... [snip!] ... up. If you are married and filing jointly, your husbands income will impact what you owe or what you have due as a refund."

Awesome I had no idea the internet bill could be deducted. Ok, one last question, what dates to I need to total the income from? Is it Dec 31st 2011-Dec 31st, 2012?

Sorry for all the questions, this is my first time reporting income from a home business : )

<blockquote><b>Quoting Expecting Emma:</b>" Awesome I had no idea the internet bill could be deducted. Ok, one last question, what dates to I need ... [snip!] ... it Dec 31st 2011-Dec 31st, 2012? Sorry for all the questions, this is my first time reporting income from a home business : )"</blockquote>




January 1, 2012 to December 31, 2012.

The "object of the game" is to keep track of all your honest business expenses to you only pay taxes on your PROFIT and not your gross. You can't run your business without the Internet, any software you had to buy and any gear you had to buy. Those things eat at your profit.

So, if you make $100/month and your Internet and phone are $75/month, your profit is $25/month. Then, any business products further reduces that profit. Your taxable income may be a LOT less than think.

<blockquote><b>Quoting Expecting Emma:</b>" Awesome I had no idea the internet bill could be deducted. Ok, one last question, what dates to I need ... [snip!] ... it Dec 31st 2011-Dec 31st, 2012? Sorry for all the questions, this is my first time reporting income from a home business : )"</blockquote>




And, no problem with the questions. I've had home businesses for a while and ive learned a great deal from accountants.
It's kinda fun after a while.

Quoting TheNuge:" <blockquote><b>Quoting Expecting Emma:</b>" Awesome I had no idea the internet bill ... [snip!] ... is $25/month. Then, any business products further reduces that profit. Your taxable income may be a LOT less than think."

Ok, but I still need to report the gross and then the deductions as well right?
also I haven't registered as a business since this started as a hobby. Soooo wouldn't expenses not count?

<blockquote><b>Quoting Expecting Emma:</b>" Ok, but I still need to report the gross and then the deductions as well right? also I haven't registered as a business since this started as a hobby. Soooo wouldn't expenses not count?"</blockquote>




Yes. You report the gross and the deductions.
It doesn't matter that this started as a hobby. You don't need to have it established as a business entity. Most very small businesses are just reported on personal tax returns but deductions are included. If people couldn't deduct expenses most business wouldn't be able to get to the next level.

Quoting TheNuge:" <blockquote><b>Quoting Expecting Emma:</b>" Ok, but I still need to report the gross ... [snip!] ... but deductions are included. If people couldn't deduct expenses most business wouldn't be able to get to the next level."

Awesome! Thanks so much : D Now I am not dreading this as bad : D
do you recommend just filing schedule C at home or actually going in to h&r block and having them do it. I don't want to make any innocent mistakes and get audited.

<blockquote><b>Quoting Expecting Emma:</b>" Awesome! Thanks so much : D Now I am not dreading this as bad : D do you recommend just filing schedule ... [snip!] ... home or actually going in to h&r block and having them do it. I don't want to make any innocent mistakes and get audited."</blockquote>




Use a professional. Hopefully, you will get someone good and helpful so you can find all the legal deductions possible and keep as much of your money as legally possible.

Quoting TheNuge:" <blockquote><b>Quoting Expecting Emma:</b>" Awesome! Thanks so much : D Now I am not ... [snip!] ... someone good and helpful so you can find all the legal deductions possible and keep as much of your money as legally possible."

Ok, thank you : D