File income taxes for sales I've made on eBay...?

Question

I recently started selling clothes and junk on eBay, but I don't know if I should report these sales for income taxes. Most of the things I sell don't sell for more than I bought them for. Also, I'm a full-time college-student, so does that make me exempt?

Answer 1

Yes, and no. IF these things are yours, that is, personal property that you are just wanting to get rid of, and are not going to buy more so that you can sell more, then you do not have to declare the proceeds as income. I know, I had the same question for personal items I was selling one time, However, IF you are selling, to obtain more, regardless of how you obtain the items, then you are engaged in a for profit venture, regardless of how much you paid for them, and then, yes, the income, or proceeds have to be declared. Being a college student exempts you from very little, and definitely not from the clutches of the IRS.

Answer 2

Technically, any money you make selling items are considered income. However the amount of income taxable is the gross revenues you received from selling the items less any expenses related to the sales. These expenses would include your ebay fees, any paypal fees, and the cost to you for purchasing these items. So you are only taxed on your net profit. If you are a student and this is your sole source of income, chances are your net profit is low enough where you do not have to pay any taxes (less than the standard deduction plus your personal exemption if no one is claiming you as a dependent).

Also, if your net profit is greater than $400, you would be subject to self employment tax, which is 15.3% of your net profit less 1/2 of the self employment tax.

Answer 3

Being a college student does not exempt you from income taxes.

If you sell your personal use property and don't sell it for more than you paid for it, you have no taxable income and no tax is owed.

If you sell your personal use property for more than you paid for it, the difference a capital gain is taxable income. on Schedule D of Form 1040.

If you are in the ebay sales business, and sell property that is not your personal use property for more than you paid for it, then the difference is taxable income.

If you sell property that is not your personal use property, and you sell it for less than you paid for it, then the difference is a loss and is combined with your gains to create a net loss or gain for your ebay business.

So...figure your total net gains from the ebay activity, and then subtract expenses to get your net income. If the total is more than $400 you are supposed to file a tax return and pay social security and medicare tax on the net income.

All the ebay sales income (for your resale property, not your personal stuff) would be reported on Schedule C of Form 1040.

If your net income from ebay plus other income is more than $8,450 (single filers), then you need to include your ebay income with your other income and file a tax return.