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I am preparing to start an eCommerce retail store and am…

Customer Question
I am preparing to...

I am preparing to start an eCommerce retail store and am doing so by drop shipping all of my products from China. I am working from my home in Pennsylvania and I'm looking for a straight forward answer on how to handle sales tax and paying taxes at the end of the year.

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

I also have an EIN number as a sole proprietor.

Submitted: 1 month ago.Category: Tax
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Answered in 8 minutes by:
3/6/2018
Tax Professional: Barbara, Enrolled Agent replied 1 month ago
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 5,784
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

As to income tax, you will use Schedule C to report your income and expenses. The net income will flow through to your personal 1040.

You will pay income tax and self-employment (Social Security and Medicare) on your NET income.

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

As to sales tax, PA is an origin-based sales tax state. That means sales tax should be collected based on where the seller, which is you, is located.

https://www.nolo.com/legal-encyclopedia/pennsylvania-internet-sales-tax.html

Please let me know if I can assist you further.

Thank you and best regards,

Barb

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Customer reply replied 1 month ago
just to clarify. If anyone in any other state besides Pennsylvania buys something from my store I don't charge them tax? I only charge sales tax to those who live in Pennsylvania.
Tax Professional: Barbara, Enrolled Agent replied 1 month ago

That's right.

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Tax Professional: Barbara, Enrolled Agent replied 1 month ago

Just following up with you to see if you have any other questions. If so, please let me know so I can continue to assist you.

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Barbara
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Category: Tax
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5,784 Satisfied Customers
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.

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