when selling things on ebay do you have to pay taxes on the money you make?

Question

also is it easy to get started

Answer 1

If you are in business, you legally need to collect sales tax for any transactions in your state. The buyer is legally obligated to pay the sales tax in their own state if different from yours. As a practical matter, that never happens.

As to income taxes, any profit you make is taxable as ordinary income.

Answer 2

It depends on what you sell.

For sure, if you buy product wholesale, an sell for a profit, that profit is taxable income. That includes Federal and State income taxes. Also, if you sell, retail to someone within your state, you may be liable for the sales tax, if it applies in you state.

Now, here's where it might get tricky. If you are selling off your own used items, the money from the sales might NOT be considered income. You paid for an item, when new, but sell it for a lower price than you paid. You may be said to have LOST money on it. I would not try to claim the loss on your taxes, because that opens up a whole lot of other regulations and record keeping requirements, but basically, is shouldn't be taxable income.

This ONLY applies to your own personal used items. If you collect used items and are in business to sell these, for a profit, then the profits are taxable, same as selling new product.

Technically, you should then declare these profits in your income tax. It is up to you to declare them on your income. If you don't, and don't get caught, consider youself lucky. But remember, if you do get caught (and they can go back several years to find these profits) the penalties are very high. And you know the old saying about ignorance, as an excuse.

Answer 3

Yes. The IRS monitors eBay and they will go after you if you don't declare the income.

Answer 4

only if its for business purposes and you charge the buyer sales tax.