If I reinvest all my earnings into more supplies, do I still owe taxes on it?

It feels unfair to owe taxes when all your money went back into supplies. You want to know how profit is really calculated.

The IRS generally requires individuals to report all income earned from business activities, regardless of the amount. While certain thresholds (like the $600 1099-K limit) trigger automatic reporting from payment processors to the IRS, they do not necessarily define a vendor's individual tax liability. Additionally, while business expenses and reinvestments may reduce taxable profit, they do not automatically eliminate tax obligations. It is important to consult IRS Publication 334 (Tax Guide for Small Business) or a CPA to understand how self-employment taxes and income reporting apply to your situation.

Track inventory costs and expenses carefully so deductions are accurate. Work with a tax professional if you carry significant inventory. Clear records help ensure you only pay tax on true profit.