What is considered taxable income?
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What is considered taxable income?
I own a computer service business. Often, I get service calls to troubleshoot network problems or fix software issues on computers. I don’t sell anything to these clients. I just bill them for my time. Is the income for this time or labor taxable?
Asked on July 18, 2010 under Business Law, Texas
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
Do you mean do you have to pay tax on the income you receive or collect tax for the service that you render? You are indeed "selling" something: your skill and expertise in computers. And if we are talking about income then yes it in taxable. But as for collecting sales tax, Texas law does require collecting sales tax for "taxable services". However, it does not appear from the list of services that your particular business requires the collection of sales tax. I will give you the link here to look at and then you can judge for your self. But I would also double check with an accountant or tax attorney. Good luck.
http://www.window.state.tx.us/taxinfo/taxpubs/tx96_259.html
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