I sold $500 worth of products on eBay so far this year for a friend. We only made about $150 each selling these items. Do we have to claim this money on my yearly taxes?. Do I get money back on a lost if a product did not sell well?
2007-09-05 02:08:26 · 5 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
all of your worldwide income is reportable to the irs unless specifically excluded by the irs and i promise you that is only a few things. you report business income on a schedule c and you can take off the amount that it cost you to make this money off as deductions. such as shipping cost, packaging, gas and oil or millage but not both. Is the account in one name? If so then that person is the one responsible. If this is something you are going to continue to do together you will need to set up some sort of partnership so you and distribute income to the other person.
Remember you have to pay the taxes to the state you live in if you sell to people that live in your state.
2007-09-07 09:00:05 · answer #1 · answered by taxpf 1 · 0⤊ 0⤋
Legally, if you netted over $400 from this activity for the year, you are required to pay tax on it. If you are filing a return due to other income, then you are required to report the gain from the first dollar. It's considered self-employment.
If you are just selling things from around your house or your friend's, it's unlikely that you had a gain since you or she probably paid more for the items than you sold them for, so no, you wouldn't report it or pay tax, but no, you couldn't deduct any losses either. If you are selling on ebay as a business, where you are buying items to sell, then selling them, then you could deduct losses.
2007-09-05 03:10:30 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
If you are selling used items for lest than they cost you there will be no federal taxes due.
If the items were sold for more than you paid for them then you have a profit & taxes are due.
If you sold old (Personal) items that are now worth more than you paid for them you could well be made to pay taxes on the gain.
2007-09-05 02:19:34 · answer #3 · answered by Floyd B 5 · 0⤊ 0⤋
This can be answered many ways. Mostly because every state has different laws. So my blanket response is, i believe you are able to roughly sell approx $2000 per year in products without claiming anything on taxes. Again im not to sure so i would really ask an accountant in your state. Good luck!
2007-09-05 02:13:47 · answer #4 · answered by Evilish13 4 · 0⤊ 0⤋
There can be taxes on any item purchased, but 14% sounds high, even in high tax places like New Jersey or New York.
2016-05-17 07:50:11 · answer #5 · answered by ? 3 · 0⤊ 0⤋