2007-01-13 05:23:03 · 7 answers · asked by antiekmama 6 in Business & Finance ➔ Taxes ➔ United States
All worldwide income must be reported to the IRS.
www.irs.gov has all the forms and instructions.
Remember when you sell something, it is not profit, and it's only the sales price.
To arrive at profit - you have to estimate your cost - plus your cost of shipping and handling to sell is added to your cost, for example.
Sell one guitar - for $5,000
Paid for guitar - $3,000
s/h 100
Cost of guitar $3,100 -$3,100
Profit on sale $1,900
This must be added as other income on your form #1040.
If you have a business you can deduct all of your other expenses on a Schedule C. which is available free on www.irs.gov.
If you make gross income under $52,000 you may file electronically for free and the site is:
http://www.irs.gov/efile/article/0,,id=118986,00.html
GOD bless us one and all, always
CPA-retired
2007-01-13 05:33:49 · answer #1 · answered by May I help You? 6 · 1⤊ 1⤋
Ebay.. the name spell success. It is a big business having multi billions dollars of tranaction happening in a year. There are countless person having a earning of 6 figure income. And of course many others having a regular income varying netween $500-$5000 per month. There are many persons, who has taken up this as a career but dropped it because they did not feel as an opportunity due to some or the other reason. There are certain guidelines which need to be followed to be successful in ebay like other business demands.For details visit
http://ebaysimplified.blogspot.com
2007-01-13 16:11:22 · answer #2 · answered by Lets find the way 2 · 0⤊ 0⤋
It depends on whether you are selling a few household items (like an online garage sale) or actually running a small business. If you are doing it with a view to making money, then it is taxable, no matter what the amount is. The $600 amount is the subject of much confusion. If someone pays you more than $600 for a service, they must report it to the IRS and send you a copy (Form 1099). However, you must declare all your income, from whatever source.
Anything over $433 is subject to self-employment tax at 15.3%.
You will have to keep a note of all your expenses. You will especially have to keep a record of your computer usage. If you keep an area of your home exclusively to run your business you can deduct a portion of home expenses. I imagine you will also have trips to the post office or UPS and you can deduct those too. You can choose between a flat-rate mileage allowance or record actual expenses, total mielage and business mileage.
Have you thought of consulting a CPA or Enrolled Agent? I know they cost money, but it can also save you money as well as a lot of headaches. Find one who is open to the idea of educting you in good record-keeping. That will keep your costs down and make it easier to produce a "clean" return.
Good luck with your venture.
2007-01-13 13:35:35 · answer #3 · answered by skip 6 · 0⤊ 1⤋
In all states, ALL sales for goods are taxed.
Taxes are levied by individual states where the sale occurs (which is generally where the buyer is).
Interstate commerce over the internet is also supposed to be taxed by the state where you sold it (i.e. if you are in Florida and sell something to someone in Texas, you need to pay a sales tax in Texas). Because you're not in Texas, they can't really do much to come get you, especially since they probably don't know you sold something in their state online. Technically, you are supposed to report it on your tax return at the end of the year and pay the tax.
As a matter of practice, most people don't actually report how much they bought online tax-free on their tax return (even if it was just junk in your closet), and you can generally get away with it, unless you're running a little company online - you might get big enough to get into trouble.
A lot of companies online have moved to taxing all their sales online, especially if they have stores in many states to avoid the possible problems down the road.
2007-01-13 13:29:47 · answer #4 · answered by lesaint770 2 · 0⤊ 0⤋
If you are just cleaning out your closets and selling stuff for less than you paid for it, you don't have to worry about it.
If you are trying to make a profit then you have to claim what you make on a Schedule C.
2007-01-13 13:31:14 · answer #5 · answered by Wayne Z 7 · 1⤊ 1⤋
You make ANY money (not just if you make more than $600), you have to report it and pay taxes on it.
2007-01-13 13:29:45 · answer #6 · answered by jseah114 6 · 0⤊ 1⤋
I think you have to sell more than 600.00 a year to claim it as a job.
2007-01-13 13:25:33 · answer #7 · answered by Elizabeth H 2 · 0⤊ 1⤋