Do we need to pay Tax?

Suppose someone opens a website and start selling T-Sirts, hook up his website to Paypal and Tranfer his funds from paypal to his personal bank account. Is he suppose to pay Tax on that income from selling those T-shirst?

Other senario, if he start selling goods on e-bay , is he suppose to pay tax from that income?

Thanks

Technicly yes...but if the income is less then 1000 then you don't need to claim it on your taxes. But i live in california so it is different in other states.

Thanks for your reply. But since he is transfering fund to his persoanl bank acount, not business (which you can do with paypal). If he wants to cheat and don't mention that as his income ...........No body will find out about that.

FALSE!

By law you are required to declare all income as taxes.

1099 misc kicks in at $600 so, if you do odd jobs for a small business and only make $570 during the year the business you are working for does not need to file a 1099, but you are still responsible for paying the taxes. If you earn $600 or more from any one employer (which can include people as well as business) then by law each employer must file a 1099 or report you as non-compliant which means they paid you more than $600 but you never provided your tax ID. At this point the business is also required to cease doing business with you until you do provide a tax ID. If you are self employed and not operating a FBN then your tax ID is your social security number.

You can try to dodge taxes. You can probably get away with it. However, if you get caught you'll wish you just did the right thing.

Speaking of taxes...
Most states also require you to charge sales tax to anyone (that buys anything from your site) living in the same state as the business is registered in (all states require you to register your business).

There is an amount. The 1,000.00 as stated above. You do not need to pay the certain amount of taxes unless you have reached that limit which i live in california, but im sure its like this through most states. But actually, if you make that much, i would pay the taxes for simple reasons:

-Its Right
-It Helps our Government (Army, Local Ordeals, Somethings good, and then usually you hear about the government wasting the money on something bad in rare cases.)
-If you get caught not, then you'll be in a big pot of trouble.

thanks for your inputs. I did not know that no matter how you make money, even if you make money by selling lemon water at street corner if you go above 600 or 1000, by law you need to pay tax on that income. I am sure 99% people will not as they are geting cash doing these odd businesses, but that what the law say that you are suppose to pay ....

I live in california too. We still live in the united states. Check your tax code and call me in April.

You need to file federal schedule C-EZ for these type of small profit ventures, which is pretty simple: You sold $3,000 worth of lemonade that goes on C-EZ, part II, line 1. You spent $1,000 on lemons and sugar. Line 2. Subtract 2 from 1 and your profit is $2,000. That then goes on line 12 of youor 1040A.

All this is figured in to the equation and is reflected on line 36 of 1040A. In turn this amount goes on your California 540A on line 12b.

If you disagree I'd like to see the tax information you're reading. Please reference.