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QUESTION: I'm a part-time "hobby" seller of used books on Amazon and eBay. Do I need to pay income tax on the sales I had last ye

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

ar?

ANSWER: Yes, you are required to pay federal income tax and self-employment tax on your net income from selling used books

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

nline, whether you sold them on Amazon, eBay, Half.com, ABE, Alibris, or any other venue.

Since you don't have an employer reportin

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

g your bookselling income and withholding a portion for taxes, you must inform the IRS about it yourself. It makes no difference tha

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

you consider your bookselling a "hobby." If you're making a profit, the IRS considers it a business, and wants its cut.

I'm assumi

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

g you won't be incorporating your business, so you'll need to report your bookselling income as a "sole proprietorship" on the long

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

tax form, IRS Form 1040, Schedule C, "Profit or Loss From Business."

You can report your self-employed income using the personal ed

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

tions of TurboTax or TaxCut software. These programs can save you lots of time, since they give instructions in plain English instea

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

of the bewildering jargon of IRS instruction manuals.

If you made a profit during 2005 from bookselling, you'll also owe some stat

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

e income tax for that, so I'd also recommend you also use the state version of TurboTax or TaxCut to figure your state tax obligatio

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

.

To complete your tax return, you'll need to account for every transaction involving your book business. If you're not already doi

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

g so, keep all your receipts and records, and put your expenses into categories such as "postage," "shipping supplies," "books," and

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

so on. This is the information that will go on your Schedule C.

Next year, don't wait this long to get your affairs in order. With

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

self-employed income, you're supposed to estimate your tax obligation during the year, and make quarterly payments on your profits,

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

ubmitted with Form 1040-ES, by April 15, June 15, September 15, and January 15 of the following calendar year. Since you didn't do t

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

his during 2005, you may owe a penalty for late tax payments. If you were expecting a tax refund this year, it may be smaller than y

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

u thought.

For next year, I'd recommend you have a separate checking account to track expenses and income from your bookselling. If

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

your bank enables you to download your transactions into Quicken or another personal-finance program, you can automatically categori

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

ze expenses such as "postage," etc., in Quicken. And next year you can transfer this same data into your tax-prep software. This wil

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

greatly lessen your bookeeping chores next year, and also give you a handy tool for examining the performance of your book business

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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