If you are a seller on EBAY do you have to file income tax on it?

Answer 1

You should pay the income tax on the income (sell price less cost and expenses) if you establish your business as a legal entity. With a business, you can claim your Ebay fees as cost of doing business, your internet provider, computer depreciation, travel for business, and many other things that will lower the amount of taxes you pay. You can also set up a tax free retirement fund to further reduce those taxes. Since the income tax is taxed on profit, you won't be paying as much as you think and you'll end up in a lower tax bracket by making the most of your deductions. You can even pursue college as a business education expense, mileage on your car, rent and utilities (portion), and so much more. Also, you can claim losses for two years while your business takes off. It makes sense to get a legal tax-paying and tax-collecting business, doesn't it???

Answer 2

Tax laws require you to pay income tax on all gross income unless there is a specific exemption. Selling items on ebay produces gross income. From that income you may take deductions such as ebay fees, postage, insurance to reduce the taxable income. Good records are therefore necessary so you don't pay more taxes than you are required.
Garage sale items of items you bought have traditionally not been taxed. Some sellers view selling on ebay as a garage sale, so they don't expect to pay taxes. Unfortunately states are looking for more tax revenue and some states have started to try and collect taxes on items, purchased on ebay, and shipped to their state. As tax laws keep changing, you should speak with a local accountant, CPA, or tax attorney regarding your specific situation.

Answer 3

It depends how much you sell. If it is the odd item then no, but if you sell alot all the time then yes as this is seen as a job. But i know alot of people do not.

Answer 4

yes