How do I claim a tax return the money that I've made on eBay?

Question

I work a regular full-time job and normally file a W2 form on my taxes every year with zero dependants. This year however, I began selling designer handbags on Ebay in November and have since grossed about $10,000 more or less. With this additional income, how do I claim a return on my taxes for this. It is alot of money and I want to report it to the IRS because I dont want them knocking my door down later. Is there another form that I have to file instead or do I keep using the same W2 to file both incomes? I have no idea about this stuff and tax season is coming up so I definetly want to be prepared. Please advise! Thanks!

Answer 1

Get Publication 17 off of the IRS' website

Schedule C is the way to go as others have said. You have some deductions to offset some of that $10k such as any PayPal fees, EBay fees, cost of the bags themselves, shipping and packaging etc. Think of all those costs you incurred that you would not have if you were not selling on E-Bay. I would read the instructions to that form.

Consider getting Turbo-Tax. They will walk through the form. Based on $10K in income, I would do my own return then take it to a CPA for a quick review for missed items.

Answer 2

The best advice would be to contact an accountant or bank personale. Or the IRS directly with the question.

Yahoo answers is good for simple questions, but too often importent questions like this come up, and people can pretend to know what they are talking about and really screw you over (parden the language). I would not ask that question here, but send the same question to the IRS or and Tax service and see what peopel who are paid to know the answer have to say.

There may be a part of the form, if I recall correctly, which ask you to list any income created over the internet. The question will most likely resolve arounf reather this e-bay sales is a buisness or just someone looking for extra cash, since that will deterime the income type.

Answer 3

Normally, you will need to file a schedule C to report the incomes and all related expenses. The net income will flow to the first page and will be subject to tax and self-employment tax (15.2%). I also agree with a previous poster in that you need to consult with a tax preparer, preferably a CPA. The IRS will generally be very conservative and you may overlook some deductions. A CPA will make certain that you get all deductions and that they are filed appropriately. They cost a little, but you get what you pay for.

Answer 4

You will file a schedule C. Here you will list all your income and expenses (you can deduct the expenses you incurred from ebay). Your net income from ebay will flow to the front of your 1040 tax return (just a little below your W-2 wages).

Answer 5

i personally wouldn't report it. there's no way for the government to see if you made money on eBay or not. report it if you want to pay social security and medicare (but not a good idea if you plan to live off it later).

but if you feel the need to be a good citizen, then report it on a schedule C on your personal tax return. Take the gross and minus all the expenses. You will pay tax on that profit. If it's a loss, then that will help you tax wise by lowering your taxable income.

Answer 6

What you need is the tax guide for small businesses. You'll need to make sure you factor in what you actually made less the costs of doing business...the cost of the bag to you, the fees, postage, etc. I'm giving you the link to the info you need. Congrats on being successful on ebay!