How does the new sales tax thingy work on Ebay?

Prairie Prowler

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I was wondering this too I recently sold an item to resident in VA ..sent an invoice which showed nothing of the taxing on it. Sent another Invoice to confirm and the tax portion came up ..as 6%..however the first invoice never had an amount for taxes ..the Buyer paid the first invoice amt. $60.00 without the added tax amount..Hmmmm
 

A2coins

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I noticed that also
 

smokeythecat

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I talked to a couple folks who sell lots on Ebay. Much more than any ordinary mortal. Apparently if you sell more than $20k a year, gross, they will send you a 1099.
 

Drmad7

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I talked to a couple folks who sell lots on Ebay. Much more than any ordinary mortal. Apparently if you sell more than $20k a year, gross, they will send you a 1099.

Sell more than $20K and 200 transactions will get you the 1099 and the IRS notified of your “business” income. EBay is required by law at that point. And so are you of course.
 

A2coins

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Yep got mine already
 

Diggin' History

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One other thing to note is that they are now charging tax on Shipping Costs.
-DH-
 

Snap on Man

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I was a Snap On Dealer in Kenosha, Wi and also sold tools in Racine,Wi. Both counties had different tax bases. I had to charge the tax for what every county I was in and send it to that county. If you shop on Amazon you will notice they charge tax for the state the product is delivered to. In my many years of being in business I had couple of shop owners who got audited for sales tax. They were not very happy. I can tell you that being audited by the state or government is a very bad thing. Once they get your number they can make life miserable for you. If I were you I would get a account and talk to him or her. I always looked at my account as a good insurance policy.
 

trdhrdr007

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I talked to a couple folks who sell lots on Ebay. Much more than any ordinary mortal. Apparently if you sell more than $20k a year, gross, they will send you a 1099.

Sell more than $20K and 200 transactions will get you the 1099 and the IRS notified of your “business” income. EBay is required by law at that point. And so are you of course.

Under IRS guidelines you are required by law to file taxes once you hit the $600 mark.....
 

mh9162013

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Under IRS guidelines you are required by law to file taxes once you hit the $600 mark.....

My understanding is that the $600 threshold has nothing to do with what becomes taxable income or not. It has to do with reporting requirements of someone else. So once PayPal, ebay, someone who pays you, etc. starts reporting something to the IRS (which is often required once you hit the $600 threshold), then the IRS learns of income they wouldn't otherwise know about. That's why you you "need" to start filing/paying taxes at the $600 mark.
 

trdhrdr007

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My understanding is that the $600 threshold has nothing to do with what becomes taxable income or not. It has to do with reporting requirements of someone else. So once PayPal, ebay, someone who pays you, etc. starts reporting something to the IRS (which is often required once you hit the $600 threshold), then the IRS learns of income they wouldn't otherwise know about. That's why you you "need" to start filing/paying taxes at the $600 mark.

I stand partially corrected. The $600 point is where most places are required to issue a 1099 (no idea why it's $20k for PayPal). That creates a paper trail that helps the IRS enforce the law....which is that your are required to pay tax on any money made in a side hustle.
 

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