Taxes and eBay

[clovis97]

Back on topic, at least for a minute:

Diesel,

On the Schedule C, the form has you break out your 'postage' and put it under office expenses, IIRC. It is a pain, and I've never been sure if I was supposed to put ebay shipping costs in this line...but I do anyway.

As always, contact a tax pro, and YMMV.

 

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[dieselram94]

Is there a certain dollar amount that when crossed requires filling out these forms along with the social security tax vs just someone selling some unwanted items (like a garage sale) in other words at what point does it become z business?

sent from a potato...

 

[dieselram94]

Back on topic, at least for a minute:

Diesel,

On the Schedule C, the form has you break out your 'postage' and put it under office expenses, IIRC. It is a pain, and I've never been sure if I was supposed to put ebay shipping costs in this line...but I do anyway.

As always, contact a tax pro, and YMMV.

I am going to call my tax lady and speak with her as you suggested. For now though I am keeping all receipts and records.

sent from a potato...

 

[clovis97]

Is there a certain dollar amount that when crossed requires filling out these forms along with the social security tax vs just someone selling some unwanted items (like a garage sale) in other words at what point does it become z business?

sent from a potato...

You'll have to call the IRS on that one.

 

[dieselram94]

You'll have to call the IRS on that one.

I'll ask my tax preparer. I think I am going to go into this more than a hobby anyways. Thanks for all your help.

sent from a potato...

 

[clovis97]

I am going to call my tax lady and speak with her as you suggested. For now though I am keeping all receipts and records.

sent from a potato...

Keep every last receipt, even if it is just for $1.

If I spend any significant money at a garage sale, train show, flea market, etc, I always ask for a handwritten receipt. "It can be on the back of a napkin, for all that I care" I often say.

I don't jack with getting receipts for a few dollars spent here and there, but if I'm dropping $75 or $475 at a garage sale or at a train dealer's table, I get the handwritten receipt before or at the same time I pay.

Sure, sometimes you'll get an odd look or strange question, but if they won't give me a receipt, the deal is OFF.

My philosophy is to make money, and pay as little in taxes as possible, and anyone that has filed a Schedule C, especially on their own, and then pay SSI tax on top of those earnings, will understand exactly what I am talking about.

Do the math. Pay $300 for a rototiller, and flip it for $450. If you pay 30% to the IRS, let's say, including the 15.2% Self Employment tax, and you don't have a receipt proving you paid $300...you broke about even on the deal. My math might be off just a little, but see what I mean?

 

[dieselram94]

Keep every last receipt, even if it is just for $1.

If I spend any significant money at a garage sale, train show, flea market, etc, I always ask for a handwritten receipt. "It can be on the back of a napkin, for all that I care" I often say.

I don't jack with getting receipts for a few dollars spent here and there, but if I'm dropping $75 or $475 at a garage sale or at a train dealer's table, I get the handwritten receipt before or at the same time I pay.

Sure, sometimes you'll get an odd look or strange question, but if they won't give me a receipt, the deal is OFF.

My philosophy is to make money, and pay as little in taxes as possible, and anyone that has filed a Schedule C, especially on their own, and then pay SSI tax on top of those earnings, will understand exactly what I am talking about.

Do the math. Pay $300 for a rototiller, and flip it for $450. If you pay 30% to the IRS, let's say, including the 15.2% Self Employment tax, and you don't have a receipt proving you paid $300...you broke about even on the deal. My math might be off just a little, but see what I mean?

Absolutely I see what you mean. I think the schedule c is what I used to file when I had my rental apartments. I just used to let my tax preparer handle all of it and I just signed it. I should have been a little more informed on the technicalities I know but I was in my mid twenties then and was more interested in other things. I used to get hit very hard at tax time.

sent from a potato...

 

[Beachkid23]

Where on eBay or pay pal does it say the state sales tax? Does it not break that down for you anymore?

 

[twiasp]

Is there a limit on how much you sell before you even have to claim taxes from ebay sales?

 

[dieselram94]

I just had another thought on this. If you sell to someone in your own state do you have to charge sales tax?

sent from a potato...

 

[vwayne1]

If you are running this properly and paying your taxes on your sales, you should be collecting taxes from customers in your state if your state has a sales tax. Check with your tax advisor/preparer.

 

[Omega]

Sell Sell Sell Sell Sell all year. Then when it is time to file taxes, make up some numbers showing you only made $1k, pay your taxes, and then collect your tax return. Doesn't get much easier than that lol.

 

[Omega]

Is there a limit on how much you sell before you even have to claim taxes from ebay sales?

20k and paypal will report you

 

[xrunndonex]

20k and paypal will report you

Multiple paypals

 

[dieselram94]

20k and paypal will report you

So under 20k and paypal won't send you a 1099?

 

[xrunndonex]

Easy to solve keep a spreadsheet of sales how much you bought item and sold item for at tax time spice it up then you won't owe money

 

[xrunndonex]

Its bs that you have to pay taxes on it unless you're making 50k or more a year

 

[GibH]

So under 20k and paypal won't send you a 1099?

20k AND 200 transactions will get you a 1099.

 

[dieselram94]

20k AND 200 transactions will get you a 1099.

So just 200 transactions under 20k and you won't get a 1099?

sent from a potato...

 

[GibH]

Internal Revenue Code (IRC) Section 6050W states that all US payment processors, including PayPal, are required by the Internal Revenue Service (IRS) to provide information to the IRS about certain customers who receive payments for the sale of goods or services through PayPal. PayPal is required to report gross payments received for sellers who receive over $20,000 in gross payment volume AND over 200 separate payments in a calendar year. In order to help you understand these changes, we have prepared the following FAQs.

Questions? Login to your account or call 1-877-569-1129

It's all on Paypal.