Easy tax question...hopefully...

[John Prophet]

Ok, we all know its tax time.

Let me fill in the scenario.

I worked until about october for a computer shop.

Ok thats easy enough.

Then I got fired, lol...(for not signing a no-compete contract).

So I collected some umemployment but then I worked for myself selling computers for the rest of the year.

I think I got unemployment for 8 weeks maybe.

All during the year from about may onward I was buying computer parts...some of them I sold WHILE I was working at the store.

So now its tax time and I have been putting it off but I need to get moving on it.

I havent went official with a business license yet.

So I am sorta clueless about what to do tax wise.

Do I need to report the $$$ from my comp sales as income...or not??

If I do have to file it as income do I get to deduct the costs for the parts etc. For instance I sold an HP computer with a chair and desk for about $800...I think I made about $250 profit or something like that, so do I get to deduct the $550 cost??

here is what I am a little worried about...that I will somehow have to pay taxes on ALLLLLLLLL the comp stuff I have sitting here now for sale....which is several thousands worth.

If I go official with a license etc now...will I still be able to claim the stuff I bought last year as expenses on this years (2004) return??


Should I just go to an accountant?? Is an accountant the proper person or is there another person who actually helps with the taxes....in other words I know an accountant is keeping the books etc, but who can help me legally straighten out all these questions??

JP

[Lemon]

I can't believe you actually want to claim the income. I think most people would have just forgotten about it. It's not like were talking thousands of $$$. What about sales tax. When you sold these systems won't your state want it's share too?

[John Prophet]

Well, my understanding is that there is no sales tax needed cuz I ALREADY paid sales tax on all of it.

I am of the understanding that sales tax would be needed if I had a license and Tax certificate and if I bought stuff tax free.

Anyway, if I end up having to show rebates as income, along with the comps I sold, it will be a couple thousand probably. Plus I did some work here and there for companies and I KNOW they will claim that work as a deduction so I need to file it in case of an audit.

Its all a pain...very hard for a one man show to even attempt to keep up with all of it.

JP

[Ed_S]

The state would want sales tax on the mark up, the difference between cost and selling price. Say you buy an item for $50 then sell it for $70 plus labor.
Sales tax on $20 would be due, as would income tax on the $20 AND the labor.

[John Prophet]

youve got to be kidding, lol.

How anal can it possibly get...but I guess that makes sense cuz its the same thing as saying income-expenses=taxable income etc.

JP