Re: Federal Tax vs State sales tax
some one asked about filing income tax -small business when it is a dropshipping business,you may not possess any inventory and do the packing and shipping ,but as a business,you do have expenses like home office,phone calls,banking,entertainment,equipments,software etc/
One interesting issue is IRS rule in regards to home office deduction,some professionals like doctors and lawyers think they can deduct home office expenses if they can use a room for bookeeping,research.
NO,it has to be a place where you earn your living,if you are a doctor,is this where you treat your patient,if you are a surgeon,I dont see how it is possible,but a shrink,a masseur,an accupuncturist can.
What would IRS think of dropshipper/
He does have expenses and he still need an office to run his business
also if you are claiming a room in your home for home office,and face a field audit,make sure the IRS auditor see that room is used strictly 100% for business,not a place where your kids can play games or you watch TV ,even after office hours.
remove all the silly non office stuff from that room like toys ,TV set unless your business needs a TV in the room.
Last edited by agent006140; 09-29-2019 at 10:27 AM.
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