Hello, I’m 18 and I would like to do art commissions through PayPal. However I’m confused on the tax aspect of it and need some help on what I would need to do?
• I don’t plan on making any more than $100-$200 a year, as I heard that $600 is what makes PayPal send a 1099-K.
• I have an actual job that I pay taxes on already. I don’t do my own taxes however, someone else does.
• I’m sure I’d be using the Goods and Services option for payment.
I suppose I have multiple questions too:
• Hypothetically, if I were to receive $100 dollars in total this whole year, would I need to file anything? Do I have to do something specific or is it okay and I just keep the money and don’t do anything?
• When I get the money from PayPal, do I have to mention it anywhere on the w2 I receive from my employer? Is there something I must send with my w2 from my art commissions?
• I’ve seen I legally must report all profits, what does that mean? How would I do it?
Thank you, and sorry if this post doesn’t make much sense.
Taxes on Art Commissions Through PayPal – Do I Need To Do So?
byu/Boog_Bear_54 intax
Posted by Boog_Bear_54
4 Comments
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If you are required to file taxes (due to income from your other job, for example) then you are required to report ALL income. Even $1 of hobby or business income. It does not matter if that income is reported on a 1099-k or not.
When you give your W2 to whoever prepares your taxes, tell them how much self employment income you made from commissions and give them a list of your business expenses. It is all reported on the same tax form – 1040.
you should report the income. Also fill out s schedule c to list any expenses associated with earning that moeny.
this could develop into a life’s calling that makes it possible to not work any other job.
When you file taxes next year, it would have your income from your W-2, plus your self-employment revenue and expenses. For instance, it’s not enough to report the $100 profit…you’d report the $150 you were paid and then list the $50 you spent on supplies so you’d only be taxed on the $100. If it’s less than $400, there’s no self-employment tax so it’s just taxed at the same rate as your W-2 income