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A quick tax question for NY/USA. Say an online shop sends me a 5k check in my name and not under a corporation, to order 300 glass cups. And I'm sort of the middle man and I will be using 4k that I got to order the 300 cups from the factory in China. That would leave me with 1k profit after all expenses are paid. Since I'm receiving the money as a sole proprietor, will I be taxed on the 5k or 1k? |
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Generally you deduct your business expenses from your business income, and pay taxes on the net profits remaining. In the US, for a sole proprietor, this is calculated on Schedule C of your yearly tax return (form 1040). |
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Generally, it may look like this: That is to say, your sale of 5000 USD is broken down as So the 1000 USD "gross" profit you earned is only then subjected to taxation. The 4000 USD you spent is basically your cost/expenses. |
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