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16 year old business owner - taxes?

by Lily, Window Shopper

  • Created: September 9, 2010, 6:22 am
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3 comments

I started a business a couple years ago making and selling custom matching girl and doll clothing and recently became aware that I would need to have a tax ID number but do not know how that would work because of my age and also the amount of revenue I bring in is not a substantial amount. 

 

So, do I need to get a tax ID?

 

If I have to pay taxes on my hard earned money, do I also get to vote even though I'm not 18?

 

Teens my age don't have to pay taxes when they get paid for mowing the neighbors yard...Or should they??

 

Thank you for any comments! I'm new at this and very frustrated that an effort to use my time productively has to be so regulated and confusing..

 

Any tips or advice?

Tags: Discuss Popular Topics, Filing and Paying Taxes
‹ reporting somebody not paying taxes? LLC in State of CA ›

jbeidle | Contributor | 9/15/2010 - 1:20 pm

Lily, Congratulations on your entreperneurial endeavors. You may need a tax ID number as explained in the previous answers but you will not have to pay any tax on the first $5,700 of income. Best of luck!
Professional Web Site: http://TaxPanningStL.com

BizResearcher | Window Shopper | 9/14/2010 - 9:02 am

Congratulations on owning a business at such a young age. You may need a tax ID number (EIN) to enable you to purchase materials at wholesale without paying sales tax. Your age has no bearing on your application for an EIN. The process is quick and easy. After you obtain the number, you will probably receive an employee tax withholding booklet in the mail, since the IRS assumes you have employees. When you receive the booklet, simply send it back with a note that you have no employees and do not need to withhold taxes from their wages.

NicoleD | Former Moderator | 9/9/2010 - 8:19 am

Hi Lily - First, congrats on your business! It's exciting to see young entrepreneuers set their plans into action. If you aren't sure if your business needs an tax ID number (or EIN) use this handy checklist from the IRS. Answering yes to any of the questions in the list means that you will need to acquire a tax ID for your business. If you do need a tax ID number, you can apply for an EIN from in several ways - through the IRS's online application, by calling their Business and Specialty Tax Line at (800) 829-4933, or by faxing or mailing Form SS-4 to your appropriate filing office. As for paying income taxes, the IRS offers specific tax guidance for young entrepreneurs, including resources to determine if you need to file federal income tax returns. If you are self-employed and earned more than $400.00 last year, you will likely need to report that income.