How Income Tax Works With eBay
If my column of eBay to pay tax on profits, there was a wave of e-mails, if they were to declare income from eBay sales to the IRS has raised a number of questions and suggestions from sellers eBay hoping that somehow I need to check that their eBay activities only a hobby instead of actual businesses and therefore were not subject to IRS taxation.
Many people argue that because their little eBay hobby a bit 'of money it does not generate business for all purposes. It seems they consider the income from their hobby into a financial manna from heaven, and therefore are not taxable by earthly tax collectors. I always talk about people trying to impress me with their "small time", but when it comes to taxes, which they call a coup, does not turn funny, my little hobby. "
All arguments aside, the conclusion I came to after reading each email was always the same: while you might think that selling on eBay is a fun pastime and the money you do not report the income, depending on the circumstances, the IRS will probably refuse.
It seems that everyone wants to make money, but hates carving from a piece of good old days of Uncle Sam Welcome to free enterprise, folks. If you go to dance, just to pay the fiddler.
The IRS rules are clear: you must pay taxes on all personal and corporate income and that includes the money that you can sell on eBay.
In its simplest sense, the IRS to interpret the rules, if you buy an antique vase in a flea market for $ 10 and sell on eBay (or elsewhere) for $ 20 to $ 10 profit, so they must be reported as income and pay Uncle Sam his fair share.
In fact, if you're a casual player seller, sold a few items off eBay and it is doubtful that the IRS will be unleashed an army of workers, taxes on a few dollars earned. However, if you continue to sell on eBay the IRS considers your company are aligned and you will be asked to submit a Schedule C and claim the income.
Like last week, the IRS uses to determine a number of factors, is a hobby that generates sales on eBay is actually a business. These factors include:
• You have the chance to drive in a professional manner?
• You have a lot of time to spend working on hobbies?
• If you rely on income from your hobby for your livelihood?
If the answer to any or all of these questions is yes, you're a business, not the implementation of a hobby, and are responsible for paying income taxes.
What is all this take on eBay? Naturally eBay is vehemently opposed to anything that could shake the boat on eBay. eBay is not tax forms in 1099 for the seller, the seller is reporting sales figures to the IRS.
eBay is considered only as a broker, which means they have a market that brings together buyers and sellers to do business.
In addition, under the current system, would be for eBay to issue accurate 1099 suppliers impossible. eBay does not track if a seller is actually paid by the buyer, eBay has no idea what - if necessary - change hands at the end of each transaction.
On the positive side, if you are on eBay as a company, you can have a variety of operating expenses, subtract, including the cost of inventory, listing fees, shipping, envelopes, packaging, for sale, etc.
You may even be able to things like buying a computer for business use, office space (even if it is a home office), deduct office supplies and more.
Talk to your accountant if there is any doubt or should not pay taxes on the earnings of eBay.
How about you with How Income Tax Works With eBay ?
