Having made the decision to sell Avon products, you now may be wondering about your tax obligations. Specifically, you are interested in finding out whether or not you need to file taxes for revenue generated from your Avon sales.
Federal Tax Income Threshold
In order to be required to file a tax return and pay federal income taxes, you need to earn a minimum of $400 in a particular tax year.
Self-Employment
Because income generated from your sale of Avon products is considered to be generated from self-employment, you have a Social Security and Medicare filing obligation as well.
Estimated Taxes
If you anticipate owing more than $1,000 in taxes through your Avon income, you need to pay estimated taxes quarterly.
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State Income Tax Threshold
Each state has a different earning threshold at which a person is responsible for filing an income tax return and making a tax payment. Consult with your state department of revenue.
Warning
If you are new to selling Avon and self-employment, consider hiring a tax professional to assist you in determining your financial liability to federal and state governments.
References
- "Working for Yourself: Law & Taxes for Independent Contractors, Freelancers & Consultants"; Stephen Fishman; 2008
- "Self Employed Tax Solutions"; June Walker; 2009
- IRS.gov: Self-Employment Tax (Social Security and Medicare Taxes)
- IRS.gov: Estimated Taxes