What are the rules for taxes when selling items on Ebay? Are the rules different for used items versus new?

Question

When you sell a used item, is it like when you sell something at a garage sale? When is it best to report the income?

Answer 1

NO, the rules for selling anything on eBay are the same as they would be for selling anything else or getting paid to perform a service (like your job). The IRS rarely cares where or how the income is generated, they only care that it is income and you have to declare it. Exceptions are for churches, non-profit organizations and so on.

If you are selling a lot of stuff on eBay then you might want to declare a small business. Then you can deduct stuff for your business; but there will be very few deductions for that kind of business. Your computer can't even be deducted unless you use the computer ONLY for your eBay business. For more information check out the IRS: http://www.irs.gov/businesses/small/index.html

Reporting the income is done on either a once a year basis, or once every quarter. The IRS prefers this, but you have to predict the income you will generate, since the reporting deadline is before the quarter ends. You only have to pay it quarterly if your small business is making close to as much money as your normal job generates. If you don't make a lot of money on eBay then you can continue to pay your income tax once a year. It would be good to calculate your base tax rate for the extra income and put it into your savings account. That way when April 15 looms near you won't get stuck with a big tax bill. There are other ways to use that money to generate more money, than a simple bank account. If you have made enough money from your eBay sales to do this though, you should consider running a small business.

Note: If the small business doesn't make a profit in 4 years then the small business deductions will be disallowed, and your business will be declared a hobby.

Answer 2

By law you are to report all income.

If just selling a few items online then I wouldn't worry about it.

If you plan on opening an ebay store and selling a few grand a month then yes, you need to pay taxes, charge sales tax for your state, etc.

Answer 3

If you are only selling a couple of things, I wouldn't worry about it. If you already paid tax on the things you are selling, the buyer doesn't need to pay tax on it again. Any one item only gets sales tax on it once. That's why if you trade a used car in on another one, you don't have to pay sales tax on the used car value.

Answer 4

hi, i'm very particular you do not, except the things you're promoting attracts V.A.T. like the promoting of a 2d hand van, the position the vat has yet to be paid. VAT is in ordinary words due once on some thing it quite is liable to vat, and the shopper has the right to understand if the vat has been paid, yet you knew that did not you? i'd say you're ok, yet to make certain, why dont you ask E.Bay, or ask for VAT on each and every thing you promote, yet ensure you declare it and pay it, even if it isn't vatable, the tax human beings will refund your funds, they ought to, or it really is robbery of your money, after all, we do not choose our authorities accused of robbery will we, They Stole my paid up Pension, and that i'm now retired, and it fee me thousands, and they prefer to tax my advantages, CHEEKY demanding confronted Basta**s not in any respect ideas, I anticipate i am going to live on Huh? purchase Tony M

Answer 5

Technically you are supposed to report all income to the IRS, then you can deduct whatever you originally paid for the item. You are supposed to have the receipts though just in case you get audited and have to prove how much you paid for them. Same goes for shipping costs and all the fees.