if you are selling items on ebay for profit, do you have to include this in your taxes?

Answer 1

If you don't want to cheat, yes. All income should be reported.

Answer 2

It depends on the scope: in the event you are running a eBay-based business or selling high-ticket items, not reporting your income could subject you to tax penalties and fees (which often are far in excess of the tax due) and (in theory) criminal charges. You'd be stupid, in this case, to not report.

If, on the other hand, you are selling an occasional item for minimal profit, while you arguably still SHOULD report it, if you're talking about a fairly low amount (a couple hundred dollars, say), then not reporting it is highly unlikely to cause a problem.

Answer 3

The profit is taxable. Profit is the difference between the cost of the item and the sale price; i.e., the taxable amount on an item you bought for $10 and sold for $15 is $5, less another other costs attached to the sale of that item.

Realistically, most people who are just selling an item or two don't bother to keep track. However, if you are selling substantial numbers of items or doing this as a second income, you need to keep good records and, yes, file it on your income taxes.

Answer 4

Technically you should be reporting the earnings as either capital gains or as ordinary income (if your job is buying and selling items on Ebay as a trader).

Is it really necessary to report the income? I'd say no; however, I rarely use Ebay so I am not sure what type of documents Ebay uses for sales. If you are getting form 1099 for each sale, you probably want to report that money because the government gets a copy of that tax form. If you don't get a tax form, I wouldn't report it because the government has no way of tracking your activity.

Answer 5

That person who mentioned "hobby income" is mistaken. ALL income should be reported.

The deal with "hobby" income is that losses are not deductible - but ALL gains are.

See a tax preparer - you'll want to deduct ebay fees, the cost of goods sold, postage, etc. Because you pay tax on your PROFIT - which is different that merely the total amount of money you receive.

Answer 6

Yes.
Does everyone? No. And they risk being audited by the IRS.

So, I say 'do it right' and report the income. But don't forget to save information on all of your expenses so you can write those off against what you earn.

Answer 7

Short answer... Yes, depending on how much you are selling you would be required to file a schedule C, SE or both. Keep all receipts of what you are spending and document everything.
Good luck

Answer 8

Income must be reported over a certain level. Check with the IRS on 'Hobby" income. I believe the cap is $1800 per YEAR.

Answer 9

Report or live in fear of an audit.
And the audit will come and they will add interest onto the amount owed and allow it to accumulate to a nice ripe sum before attaching a lien on your property.