Taking care of your taxes correctly is something you want to make sure you are always doing. It’s something you don’t want to risk. So in today’s post, I’m going to discuss how I take care of my print-on-demand taxes and what I recommend for you guys. Hi everyone, welcome back to another post. If you’re new here.
I like to talk about t-shirt designs ideas and sharing the resources and tips and tricks that I wish I had along my journey. So if you’re interested in making money online, feel free to look around the website. So you guys have been asking me in the comments, ‘what do you do for taxes for print-on-demand?’ ‘How do you properly handle it?’ Questions like, ‘do you need to have a business entity?’ ‘Do you need a business bank account?’ ‘What kind of selling permits do you need?
All of that is going to be taken care of in today’s post. So before we get into this post, if you guys enjoy this post and the other ones on the website.
So the second thing before we get into this post is that I am not an attorney. I am not a lawyer. I am not a tax prep person. I am just someone sharing my advice here on YouTube. These are my opinions and how I take care of my taxes for print-on-demand. So I think that should get me off the hook with all of these disclaimers for legal advice.
With that said, let’s get right into this. The very first thing, if you are in a hurry, the quick answer is No, you do not need to set up a business entity.
No, you do not need a business bank account, and No, you do not need any seller permits to sell print-on-demand online. Essentially, all you have to do is all the profits that you make; you just report on your income tax under the category of Other Income.
1 So there are so many different ways to file your taxes.
whether you’re using TurboTax, you’re using an automated system, or you have a tax person or if you fill out the forms yourself. But the general idea of how you want to be reporting your taxes for print-on-demand is to put it in Other Income and then note it as the website. So, for example, teespring.com.
The description is ‘selling t-shirts’ and then how much money you profited that year. Now the exciting thing with Teespring is explicitly all of your profits buildup in your Teespring account. You get to choose when you cash out and receive those funds. So specifically for teespring.com.
You only pay taxes on the profits that you paid out from your Teespring account in that year. So hopefully, that makes sense for Teespring. If you have any questions about that, let me know in the comments, and I can clarify that further.
Now for the other two big players in print-on-demand, you’ve got Merch by Amazon and Redbubble. They pay out automatically, so whatever you receive in that year that you’re paying taxes on, that’s what you will put in the Other Income.
So hypothetically, if you sell on Teespring, Merch by Amazon and Redbubble, in your Other Income that you’re putting on your taxes, you will have three different income sources; Redbubble, selling t-shirts, how much you profited and then Teespring, selling t-shirts and how much you paid out in that year.
As far as a business entity to set up, you do not need a business entity. All this goes through your income like I was saying.
Now a stipulation to that is that once you start making $10,000 to $50,000 or more per year from print-on-demand, I recommend looking into or at least talking to someone about considering setting up a business entity.
This will take all that income and separate it from you. Now you don’t need to do this, but it is something to consider because it is substantial income, and you want to make sure that the IRS is happy and you’re doing everything by the books.
This makes a divide between the business and you. Now the business type that I recommend for this (and again, this is just my personal opinion) is a single-member LLC, and you can do any business that you like. The single-member LLC is very simple to set up. It’s about $130 per year to maintain that, and it puts the business separate from you.
If you do get to this point and decide that you want a separate business from you for all of the income for print-on-demand, you will have to make a business bank account. The business bank account, although it may sound a little bit complicated, is straightforward.
You go into a local bank; you can choose anyone you want and open up a business checking account. This is different from a personal checking account. It’s considered a business checking account.
But it should be completely free. The two main things that you want to look for in the business account if you do get to this point and go this route of opening a business bank account are: it doesn’t have any fees. You don’t want it to have any monthly fees or any annual fees to keep it open.
And two: that it has reasonable minimums. Often, they will have a minimum of $2000 that you have to keep in the account, or you get charged a penalty fee. However, there are banks out there that have minimums of something like $5.
So you want to make sure that you’re looking for one that has a reasonable minimum. I think 2000 is too high. So you don’t want to go with that. Try to find a bank that has a minimum of something like $5, which is much more reasonable, in my opinion.
2 business filed
The last thing to know about a business bank account is that to set it up, you need to have the business filed to bring in the business’s information to open the account with. So make sure that you’re doing that in order.
You have to make sure that you set up your business entity first, and then you open your business account. Now again, I want to say one more time that these are very optional things. You do not need them. But it’s something to consider once you start making substantial income.
Moving on to the next big question in this post is, ‘do you need any selling permits for this?’ And I can answer at least in my opinion for the United States; you do not need any special selling permits or anything.
You can sign up for the accounts, upload designs, and collect your profit; easy as that; You don’t need anything special. Another common question that you may be having and I want to answer is PayPal if you need a PayPal business account or a free personal PayPal account.
And the short answer here is you can use a free Personal PayPal account. It should be effortless to set up, maybe five minutes for you to set up a PayPal account. You will get the email address associated with that PayPal account, and you can enter it on the different print-on-demand websites.
You do not need to set up a business PayPal account. The only time you’ll need to do that is again if you’re moving into a business entity with a business bank account. You may consider also setting up a business PayPal. Now, believe it or not, the personal PayPal and the company are entirely free to set up.
Either one you go with, but you don’t need to open a business PayPal account if you don’t have a business associated with it. So know that for most of you guys with print-on-demand, if you’re having everything flow through to your income and paying it on your taxes, you do not need to have anything business-related.
As far as getting paid out on the top three big players that I’m always talking about, which are Teespring, Merch by Amazon and Redbubble. It goes like this; on Teespring, you can connect a PayPal or a Payoneer account. The only difference between the two is PayPal is more United states-based, and Payoneer is geared towards international payments.
Both of those are completely free to use, but that is how you will get paid out on Teespring. And remember, you’re only paying taxes on what you paid out in that year. Now moving on to Merch by Amazon, there are a couple of payout options you’re going to either be able to make a direct deposit to your bank account.
And remember, this can be your bank account or a business bank account. You can get Amazon gift cards as payment, or you can get a check physically mailed to your house. I recommend going with the direct deposit. That is going to be the easiest route here. Amazon pays out automatically, so you don’t have to request any payments.
And you are then moving into the third one here, Redbubble. This is going to be a PayPal payment, and that is going to be automatic as well. So to make this easy on yourself, the way that you find the totals for the previous year’s tax is you go over to PayPal, this will allow you to do Teespring and Redbubble, and what you can do there is just sort PayPal by the previous year that you’re paying taxes for and then type in the name of the person paying.
So let’s say it’s Teespring for example, this will show you on PayPal how much money you received all the different transactions that you paid out from Teespring in that previous year, add up that whole number, and that is the number that goes on your Other Income on your taxes.
You do the same thing for Redbubble, you type in Redbubble, and it’ll show you all the payments you received in that year, add them up and put that for Redbubble. Now for Merch by Amazon, it’s the same concept.
You go over to your bank or wherever they were paying to direct deposit, and you sort it by Amazon, and you’ll be able to add up all the payments you received from them in that year. Very simple to do, and it’s not complicated.
I hope this post has helped you guys. If you have any questions about it, feel free to let me know down in the comments. Remember, I am not giving you legal advice; this is my personal opinion. If you enjoyed this post, Remember, if you have questions, let me know down in the comments, and I’ll be seeing you guys all in the following posts.
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