Start Your Online Art Career: Taxes and Related Guidelines for 16-Year-Olds in Texas

As a 16-year-old living in Texas and considering starting online art commissions, understanding the tax implications is crucial. In this article, we will explore whether you need to pay taxes, when to file, and how to manage the process effectively.

Do You Have to Pay Taxes on Your Online Art Commissions?

Yes, you will have to pay taxes on your online art commissions, even if you are just starting out. The tax requirements can vary based on your income and the state you live in.

Federal Income Tax

As a minor earning income from art commissions, you will need to pay federal income tax to the Internal Revenue Service (IRS).

Income over $1,295 (for tax year 2022) will require you to file a federal income tax return, even if your income is less than $600. You can use Form 1040 or Form 1040-SR, depending on your age. To report your income, you should use Schedule C, Profit or Loss from Business. Include all income earned from art commissions and any associated expenses.

State Income Tax

In Texas, there is no state income tax for individuals. However, if you live in a state with a state income tax, you will need to file a state tax return and pay any applicable taxes.

Withholding and Refunds

Even if you are under the income threshold for federal taxes, you may still be required to file a return if tax was withheld from your commissions. By filing, you may be eligible to receive a refund of the taxes withheld.

Other Considerations

For comprehensive tax management, it is highly recommended to:

Consult a Tax Professional: A Certified Public Accountant (CPA) or a tax attorney can provide guidance and help ensure you are in compliance with all tax laws. Hire a Resale Number: You should obtain a resale number so you can collect sales tax, which is usually required for businesses earning over a certain threshold. Keep Detailed Records: Maintain accurate records of all income and expenses related to your art commissions. This will help you prepare your taxes and avoid penalties. Set Aside Funds: Allocate a portion of each commission to cover taxes. This will help you manage the financial burden during tax season. Consider Professional Tax Preparation: Utilize a tax preparation service if you are not familiar with the complex tax laws.

Conclusion

Starting your online art career at 16 is a great opportunity, but understanding your tax obligations is essential. By following the guidelines outlined in this article and seeking professional advice, you can manage your taxes effectively and ensure a smooth start to your new venture.