Im still not understanding what I have to do for taxes, for selling my friends and cousins stuff on EBAY.?

Question

http://answers.yahoo.com/question/index;_ylt=AqTSeLgoW8DcsCjR9v_a87bsy6IX?qid=20070806110312AA41jhR

This is the last question I asked, And so.. Ive already sold over $1200 but still gonna make another 1000 off their products, I get my cut of 15% How do I start filling out my taxes? Im done with ebay in 2 months... Should I get everything then? I dont want to be taxed on items i sold for them when Im only making 15%

Also if you answer this question.... Why can they be taxed? When they were already taxed when they bought the items?

Answer 1

You would only pay taxes on the 15% that you actually get.

For your other question on why THEY would be taxed - if they paid more for the items originally than they actually got for them (after deducting your 15%), then they wouldn't pay tax. They'd pay tax only on items where they had a GAIN, and only on the amount of the gain.

Answer 2

Your income is the 15% less any costs you paid. If the 15% is after all expenses, then the entire amount paid to you is taxable income.

Are you doing this for money or as a hobby, not intending to make a profit?

If you are doing this for profit, then you are self-employed and you must file a tax return whether you owe income tax or not. You will fill out and attach Schedule C or Schedule C-EZ with your tax return. You will have to pay Social Security and Medicare taxes on this income. This is computed using Schedule SE. If you use a software package it is very simple.

If this is a one-time deal you are doing for your friends and relatives, and you are not doing this for a profit motive, then it is hobby income. If your total income is under $5,350 (if you are a dependent) or $8,750 (if you are not a dependent), you do not have to do any tax return and you will not owe any tax.

If you are doing this as a hobby and your total income is more than the amounts mentioned above, you have to do a tax return. Just put the ebay money you received on the line for "other income" on Form 1040. No Social Security or Medicare tax will be due.

If the items being sold are personal items that are sold for less than their original value, the money received is not taxable income to the owners. When the owners then pay you part of this money, it becomes taxable to you.

Answer 3

Your only "income" would be the 15% commission you take. Who is paying for the ebay fees? Are you paying that out of your 15% ? - If yes, you'll be losing a good portion of that income. You should get reimbursed for the bay listing and closing fees in addition to your 15% commission, You won't really have much in the way of taxable income - don't worry about it - but make sure you get all your costs reimbursed - take 15% of the sales price - before ebay fees and if ebay acct is in your name, make sure you deduct all ebay fees and your 15% before giving the people their money back. If you list an item and it sdoesn't sell - sharge them - don't absorb the cost yourself