US Tax IDs for online stores?

[tulagirl]

Could someone please walk me through how to set up a tax id for an online store?  I am so confused on this and I thought those of you who have etsy or ebay stores could at least tell me how you got your tax id as well as how you pay your taxes with it like do you have to report your income quarterly?  Who do you turn your state taxes that were paid by buyers in to? I am really confused. Help please.  USA only. Thanks.

[ponylady]

To obtain a tax ID for an Ebay business you have to apply for one through the IRS.

http://www.taxid-gov.us/

But just so you know if you are running a sole proprietorship you are not required to obtain one if you do not wish.

I would suggest Googling how to report your taxes to the IRS for Ebay earnings. And read as much up on it as possible. There is tons of great reading out there on it.

[tulagirl]

Yes I have done that but, I am confused with details and am hoping for a little extra help.

[ponylady]

You'll get a 1099-K from Paypal at the end of the year.  You will then be taxed as a Sole Proprietor, and have to file a Schedule C on your income tax return.  This is what the form looks like:

http://www.irs.gov/pub/irs-pdf/f1040sc.pdf

I use a program through Ebay called Outlook which helps keeps track of all your transactions and fee's associated with it. It helps come tax time because the 1099-K that Paypal sends out is not completely accurate. I also keep receipts for everything. Outlook will also let you know when and what is owed if you decide to pay quarterly taxes. 

[tulagirl]

Oh that is very helpful thank you so much. I didn't realize they had something like that. Thank you.  I am guessing you must have to make a certain amount of money before they send these out because, I have never received one just selling on my own. I have just taken my receipts in to the tax guy.

[ponylady]

They only send you one if you make 20,000 and have 200 transactions. But both criteria's have to be met before one is sent out.