Question

Comic Book side gig

Forum|Forum|3 years ago
August 31, 2022
1 reply
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Hello I have a question about my comic book side business. Let's say this year I sell $15,000 of comic books but also buy $12,000 of new product. Im I only responsible to pay on $3,000 of profit or would I owe tax on all 15,000 and buying new product and has no effect on that?

John-H2021

Hello

You would need to report the income and expenses on a scheduleC (self employed income and expenses)

You would need to complete the section for inventory--cost of good sold

Start by reporting the value of your inventory at the beginning of the year. This amount is usually the same as what you reported for closing inventory on last year's Schedule C.

Next, report the following costs and add them to your beginning inventory:

Merchandise, but don't include the value of anything withdrawn from sale or for your personal use.
Wages paid to production workers, factory supervisors and the like, if you're in manufacturing or construction.
Expenses for supplies and other overhead.

From that total, subtract the value of your closing inventory. The result is your cost of goods sold. Enter that amount in Part I to reduce your gross income.

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