posted on November 27, 2001 05:58:13 AM new
I know this has probably been addressed her before. But could some of you offer your "outlook" on taxes and Ebay. I know REAL businesses do, but what about you mom and pop operations who list maybe 30 or so auctions a week(or more or less) of used clothing, etc. I am not talking about resellers who purchase in bulk, but the onesie, twosies of good old yard sale type items. And if you do, when and what point do you advise getting serious about Ebay as a TRUE income. Thanks, Lisa
posted on November 27, 2001 06:17:40 AM new
Between ebay and half, my income from sales was in excess of 25K last year and I reported every penny of it.
But this was balanced by my costs, both for the items themselves, and shipping, ebay fees, credit card fees, etc. I did not deduct for a home office (almost automatically triggers an audit - and while I have nothing to hide, I don't want the hassle and wasted time it involves.) The IRS rules are very harsh for home offices ie if you store supplies in the den with your Christmas decorations, it is disqualified because you have personal items there. The room must be totally dedicated to business.
It turned out I owed social security self employment taxes on the modest profit.
But by paying my taxes, I now know the true costs of selling on ebay. In fact, they are similar in some ways......aw, never mind, I am thinking positive today.
posted on November 27, 2001 06:41:48 AM new
one dealer who also does accounting work for others reported that one antique dealer who has a brick and mortar shop as well as selling on ebay was audited by IRS.his ebay records were requested and it took ebay 4 months to produce his records,he now owes IRS over 100,000 in backtax,interest and penalty.
his ebay sales is not a lot but it is there,his b&m sales is the main problem
posted on November 27, 2001 10:26:27 AM new
Technically, all income is supposed to be reported...
I report it, but I do this full time (auction sales, and internet consulting) - It does allow me to have nice write-offs though, such as internet access, cel phone (where my toll free business line gets forwarded to) - Gas, mileage, etc. Taxes suck though, but what are you going to do! At least since I moved to Oregon I no longer have to collect or pay sales tax. When I was in California, I am sure that scared buyers away because it really does make a difference - It did for me when I purchased things that I was not planning on reselling, and thus would not qualify for a tax free transaction.
posted on November 27, 2001 01:18:35 PM new
I'm a relatively small seller, and I do report all my eBay income...and all my eBay deductions, including my in-home office. Better to be safe (and honest) than sorry.
I live in CA, and have a resale license, and I also report all sales tax collected for CA. It takes about 15 minutes to fill out the form and write the check (which is usually under $50).
While it is unlikely that the IRS is gonna track you down and do nasty things to you for a $500 eBay profit, why take the risk, particularly when that money can be offset quite a bit by your legitimate deductions?
