Paypal tax???

Question

1)i buy on ioffer.com and sell on ebay.com When i go do my taxes do i have to say
a.)THE FULL AMOUNT OF $$ THAT I MADE (NOT PROFIT)

OR

b.) DO I NEED TO TELL THEM MY NET PROFIT (THE PROFIT I EARN FROM RE-SELLING. for ex.) i buy for $40 and re-sell for $60 = $20 profit

-please specidy wich letter is correct once filing a tax return


2.)ALSO, I'VE MADE AROUND $700-$800 (CHOICE A.) ABOVE TYPE) AND AROUND $300-$500 PROFIT (CHOICE B TYPE) . SHOULD I FILE THAT ON MY TAX RETURN

3.)DO BUYERS HAVE TO FILE THEIR MONEY SPENT ON THEIR TAX RETURN?

4.)CAN THE IRS CATCH ME WITH THE AMOUNTS I MADE STATED ABOVE? SHOULD I FILE THE AMOUNTS OR IS IT NOT WORTH IT.

5.)ALSO, IF I SELL THINGS ON EBAY AND THE BUYER USES A CHECK AS A PAYMENT METHOD, WOULD THE IRS CATCH ME FOR THAT OR NO? SHOULD I FILE THAT?

The person who answer A L L of my question (in that order) will recieve the best answer. PLEASE SPECIFY YOUR ANSWERS LIKE THIS:
1.) YOUR ANSWER TO MY QUES.
2.)
3.) ETC.

6.)ALSO, WHAT IT I MAKE LIKE $500, DO NOT FILE IT IN MY TAXES, CLOSE MY PAYPAL ACCOUNT AS WELL AS MY EBAY ACCOUNT? WILL I GET AWAY WITH IT?

Answer 1

1.) Neither letter in your example is exactly right - actually, your return should show both. On your schedule C or C-EZ you show your total gross income, then your total expenses by category, then subtract to get your net profit which is what you pay tax on.

2.) yes

3.) no - personal purchases aren't taxable or tax deductible.

4.) Yes they can catch you. Yes you should file - whether you do, or file a fraudulent return and omit the income or just don't file at all, is your call - doesn't seem to me that it's worth the risk of getting caught.

5.) File what? You file all of your income - it doesn't matter how they paid.

6.) Will you get away with it? Maybe. If you get caught, you'll pay back lots more than you would have owed if you'd been honest in the first place. Is it worth the risk? Your call.

Answer 2

1. all income is taxable. report a. on a schedule c

2. see above

3. you report according to answer 1, the costs of items purchased for resale is the cost of the items you purchased.

4.Yes they can...and they will!

5. Yes they can, don't you think they track ebay and your paypal account?

NOW dude, since you know enough to want to defraud the government you probably know enough to get your tax return flagged for an audit. So I suggest you protect yourself and get your taxes done professionally. Go to a Jackson Hewitt office, H & R puff and stuff will not answer your questions, Jackson Hewitt will.