I'm currently selling items on ebay and needed to know when do I have to pay taxes?

Question

I decided to file Scedule C because it is easier. I have been selling things since December 2006 and need some advice on how to pay taxes retro... or even mention it?
Let me know guys, Thanks a bunch.

Should I report from dec-06-4/07 on that form and send it in?
When do I send it in, and how would the IRS know I'm reporting Retro Sales?

Answer 1

1. Your income will be self-employment income. On your tax return it is to be reported on Schedule C of Form 1040.

2. You must keep track of your gross sales and expenses to figure out net profit. This net profit is subject to Self Employment tax @15.3%. For this you will file schedule SE (Form 1040) with your Form 1040.

3. You may be required to make quarterly estimated tax payments to make sure that your tax due (SE tax and federal tax) does not exceed $1,000.

4. File your return Form 1040 and pay the balance tax due.

5. You are required to file if your self-employment income in a year is $400 or more.

Additional: If you have already filed your 2006 return, then you need to file 1040X with schedule C to return your eBay income. If you did not file your 2006 return, then you must file if your eBay income (income less expenses) are $400 or more. You will attach schedule C to Form 1040.

Answer 2

If your profit in 2006 was over $399, then you have to file a separate return for 2006. It's overdue, so file it as soon as possible.

For 2007, if you're going to owe taxes of over $1000 for the year including self-employment tax, you should have been making quarterly payments through the year. Three of the four dates have come and gone - the last is January 2008, so figure out your estimated tax for the year and send it in by then. Your tax return will be due by April.

Answer 3

Quarterly