Income tax on the gears shiped to foreign country

Hi Elizabeth,

Thanks!

If I am not mistaken, what you describe is customs duties or customs taxes.

Do you know about income tax reporting to IRS? I don't want to get into trouble with IRS.

By the way, I don't make money on this transaction.

Should be no need to report as an income to the IRS.

Don't confuse income tax with sales tax. They are two different animals.

What you are describing is a sales transaction. If you are in the 'business' of selling (gears or anything else), then you should already be registered with your state and have sales tax reporting requirements. I would expect your state to require you to collect the sales tax from all sales transactions with customers who are not tax exempt. In turn, you send this money to the state along with some forms. Please keep in mind that some states do collect sales tax from tax exempt institutions so you really do need to know your state's regulations. If you think you fall into this category, find a CPA to speak with.

If, on the other hand, this is a rare and isolated sale, then it is possible that you have no reason to report this sale to the IRS.

It is not likely you would need to report to IRS unless the transaction is considered income. With this type of question you should always consult with your accountant.

Unless you are running a business - it's duty that needs to be paid in the receiving country and it's your buyer who must pay it, not income tax. The IRS is not involved in that transaction. If you are running a business the "income tax" if there is any is reported in the US and you have to pay it.

Thank you all for your inputs.

By the way, I am a non-commercial individual and don't make any profit on this transaction.

Happy Listening!