Hi I do a online business on ebay and it makes me good money, but I dont have a regualr job that will go into my irs as taxes. I want to buy a car is there a way I can like put the money that I make online into my irs, if so wont I pay money? Also is there a way not to do it without the proof of income can I show them something else. My credit score is gona be 702 around there in 2 months. I want to buy a new car, (first time buyer) How would I go about doing this all? Thanks in advance!!!
2007-06-12 19:11:30 · 5 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Uh... hello.... your income from ebay IS TAXABLE! Whether you report it or not, you are legally required to pay taxes on your earnings on Ebay. Income tax means tax on all kinds of incomes... including ebay!.
I recommend:
1) Start paying your taxes. If IRS comes after you, you will have a big headache on your hands as you would have to justify each transaction going back 5 years. You may want to file prior year taxes if you haven't and just pay the penalty.
2) The normal way for lenders to establish your income is through pay stubs or W-2's. For people who have their own business (like you), they will ask for 2~3 years of tax returns.
p.s. - bank statements are NOT acceptable proof of income. It is only a proof of assets. If you have that much money, then you might as well just buy the car with cash.
Just Be!
2007-06-12 19:20:30 · answer #1 · answered by MBA Don 4 · 0⤊ 0⤋
You can't report your ebay income to the IRS without having it subject to taxes. If you are a self-employed seller on ebay, you fill out Schedule C showing all your expenses, and you pay income tax, plus Social Security and Medicare taxes, on the net profit.
Then, if you want to take out a loan, you submit your tax return to the lender to establish your income.
Otherwise, you are stuck with paying cash. If you have a lot of cash, you can get a "passbook" loan against it from your bank if you really want a loan and do not want to pay cash. Doesn't make a lot of sense though.
So, file your tax returns showing your income, and then you will be able to get a loan.
2007-06-13 11:09:50 · answer #2 · answered by ninasgramma 7 · 0⤊ 0⤋
The money you make from your online business is taxable income - you not only can, but are legally required to, report that income on a tax return. And yes, of course it will cost you money - that's what taxes are!
By not reporting this incom every year on a tax return, you are evading income tax and are subject to penalties, or even possible criminal prosecution, when you get caught.
2007-06-13 02:36:16 · answer #3 · answered by Judy 7 · 1⤊ 0⤋
What I recommend is that you make your online business legit. Get an official DBA (Doing Business As) from the court house It could cost from $10 to $100 depending on what city and state you live in. Then get your Tax ID number (also referred to as EIN number). This should be somewhere under $50. Once u do those two things, your business will have its own tax papers. U will then be doing business under an official name. (The benefits will greatly increase once you become an official business). Business from their will greatly increase. Also with your good credit line, looking into incorporating might be in some of your interest. Hope the information helps...keep in touch, you could be a prospective business partner.
2007-06-13 02:33:22 · answer #4 · answered by truthseekers313.com 2 · 0⤊ 3⤋
Use your bank statements as proof of income instead of pay stubs and t4's. Your tax return is a good thing to use too. (I just bought a new car last week)
2007-06-13 02:17:35 · answer #5 · answered by MAK 6 · 0⤊ 1⤋