Hey guys I’m new to all of this. But this past year I started selling pre packaged tea at farmers markets. I have 67k in total sales. I pay 10% stall fees and also whole sale inventory and drive myself. Realistically how much % am I going to owe the IRS? Any tips ? I use the square app.
Posted by vagabundo_99
4 Comments
Self employment is 15 .5 ish % of your net so if you end up making 45k after expenses that’s about 7k in self employment
I assume you have cost of goods to deduct off your sales total, so plan for about 30% after figuring out your approx net (sales less expenses.) That should cover your federal income tax, social security, and Medicare. SS and Medicare alone are 15.3% since you pay both sides. Unless you have a bunch of other income, the remaining 14.7% would more than cover your FIT. Make sure to also plan for state income tax if that’s a thing where you live. But again, make sure you are calculating it in your net income, not your gross sales.
There is a lot of info missing here, like what state you are in, and what your mark up is from wholesale, and if you are married, any kids, and if you have other income or not.
A single person, no other income, in Florida, no kids, 40% markup, so we assume 28k of profit would pay about $5000 in federal income tax.
It doesn’t matter what your sales are, it depends on what your expenses are – ie how much does the tea cost you? With what you’ve said you could be losing money and owe no taxes.