A lot of people have suggested that I use eBay as a source to make some extra money. However, I was wondering if that is like selling your items at a pawn shop or consignment shop (and you don't have to claim the profits on taxes) of it was more like a job. I've spoken with to reps on eBay live Help and one told me that I would have to call the IRS and the other told me that no, I did not have to. I live in Pennsylvania. Does anyone know for sure or from experience? I don't see how I would get a W2 in the mail from eBay. I don't know that you have to put your social security number in when you make a seller's account, either, but I'm not positive.
2007-12-11 06:37:48 · 6 answers · asked by thai 5 in Business & Finance ➔ Taxes ➔ United States
If you are going to sell items on ebay for a business, then yes you need to claim the income. If you are going to use e-bay like you would a garage sale, to get rid of some items in your house that you no longer need or use, then I would say no!
2007-12-11 06:46:57 · answer #1 · answered by Emily E 6 · 2⤊ 0⤋
Go to IRS.gov and search on "online auctions"
The tax rules will depend on whether you are selling personal items or items you bought specifically for resale.
Personal items at a loss, no reporting (same as selling at a loss to a pawnshop).
Personal items at a gain, report on schedule D (same as selling at a gain to a pawnshop).
Items bought for resale in a for-profit activity, schedule C and if you are really successful, schedule SE for social security taxes.
Items bought for resale, but not deemed for profit are hobby income. The gross receipts go on "other income" and the expenses go on schedule A. (A raw deal, but it's what the IRS does to people who raise horses or race cars for fun.)
The IRS has asked eBay (and all online venues) to start tracking sales. In the future, you would receive a 1099 showing sales over $5000 and/or 100 or more transactions. Whether or not you get the form, you are required to track taxable income.
2007-12-11 06:45:57 · answer #2 · answered by Anonymous · 1⤊ 0⤋
If you don't give them your Social then they won't be sending your info to the IRS, no.
Should you report the income though? It depends.. are just selling items that you don't need/want anymore? If so, then you are not required to pay income tax on those items.
If you are however selling on ebay for all or part of your regular income then you should report it. Of course you could probably get away without reporting it, but you better hope you are never audited.
2007-12-11 06:49:38 · answer #3 · answered by my brain hurts 5 · 1⤊ 0⤋
For income tax, it depends on what you are selling before you have to claim any income and expenses for taxes. If you are selling you own stuff that you are just looking to sell so its no longer in your home, you only need to claim the gains on the sales for income tax and report those gains on Schedule D.
However, if you are running a business, then you will need to claim the sales and related expenses on Schedule C. If your profit is over $400, then you need to file Schedule SE as well.
For sales tax, you have to charge sales tax for all deliveries made within Pennsylvania. PA may have a sales tax exemption for casual sales below a certain dollar amount of total sales. I don't know if there is such a law or not.
If you sell over $5000 worth of goods on eBay, I beleive they are required to file a 1099 for you.
2007-12-11 06:48:39 · answer #4 · answered by Steve 6 · 1⤊ 0⤋
Your tax individuals are incompetent. What they instructed you replaced into to illegally stay sparkling of taxes. in case you have been purely merchandising your previous stuff on ebay, possibilities are high you would be merchandising for under you initially paid for the products, so might have not have been given any earnings. No earnings = no tax. yet considering which you're procuring products and merchandising them for better than you paid, legally you DO ought to document the earnings and pay tax on it. you ought to document an amended return and declare the earnings. If the $8000 is what you made after costs like procuring the products, and expenses, delivery expenses, etc, then that's what you will pay tax on. If that replaced into your finished ebay sales, you may subtract costs and purely pay tax on your internet earnings.
2016-11-02 22:10:57 · answer #5 · answered by Anonymous · 0⤊ 0⤋
If you are just selling your own stuff, it's very unlikely that you are making a profit over what you originally bought the things for, so you wouldn't have any income to report.
If you are making it a business, buying items cheap to resell on ebay for a profit, then yes the income is taxable.
2007-12-11 06:45:35 · answer #6 · answered by Judy 7 · 2⤊ 0⤋