posted on January 30, 2004 06:06:27 AM new
I've been around the online auction action for awhile, though I'm new to this chat area. One thing I have noticed is the large number of retired and over-50 people involved in eBay.
Part of that is probably demographics -- that's a growing segment of the population. I think I'm slowly catching on to the rest, though, since my Social Security statement arrived recently.
(I've also noticed that people go into frenzied spasming whenever someone speculates that eBay will start reporting to the IRS.)
So, my SS statement. If I retire at 62, I get $1033 a month. If I hold off until 66, I get $1371. If I'm a real glutton for punishment and keep working until 70, I get $1809.
So I did a little research. It appears that:
-If I "retire" at 62 but sell a ton of stuff on eBay and report the income, the SSA will limit my benefits.
-If I "retire" at 65 but sell a ton and report the income, my SS benefits won't be reduced but may become taxable.
No wonder seniors love eBay. It's the great untaxed unreported income source. This seems like a big story that the media would be all over, but I could find nothing when I Googled it.
Am I missing something here or will I just be shot for bringing it up?
posted on January 30, 2004 06:29:37 AM new
Social Security will (I believe) allow you to make up to $30,000 per year without affecting your benefit amount. Check with your local office - you might even find someone that knows. Of course, you will have to pay income tax on your earnings. If you set up eBay as a business and you net over $30,000, you are really, really doing well!
posted on January 30, 2004 06:41:45 AM new
Hi earthmum, it looks like whether you are penalized or taxed for additional income depends on how old you are at the time. Here's what I found:
"You can work during retirement, but if you earn too much, it will reduce the size of the benefits you are receiving from age 62 to age 65. The limits on such earnings are currently $11,520. Benefits are reduced by $1 for every $2 that you earn over this amount."
That was the SSA limitation I referred to earlier.
So, grabbing an envelope and doodling on the back, I get:
$12,396/year with age 62 retirement
$11,520/year in reported "eBay earnings"
$23,916 total without having to give up any SSN benefit.
Clearly if I don't report any "eBay earnings" I don't have to worry about those paltry benefits being reduced even further.
I'm two decades away from retirement but I have always felt that the way Social Security is set up is an insult to the people it is supposed to benefit.
posted on January 30, 2004 08:13:38 AM new
Hi Teach (you don't mind if I shorten your name, do you?) I retired last June at age 65. The Social Security worker that processed my claim said I could receive benefits back to January of 2003 as long as I did not make over $30,000 that year. I do report my eBay income to IRS, and have for the past four years. I remains to be seen what will happen with my taxes for 2003. I have an appointment with a CPA in mid-February - can't wait!! I did find the process of applying for benefits confusing. Having said all that, I must add that I am really enjoying retirement and eBay keeps me just busy enough.
posted on January 30, 2004 09:54:47 AM new
Most of us who are not just casual sellers do report to the IRS.
Anyone would be foolish not to. Ebay keeps the records forever and will happily turn them over if requested. Plus, how do you explain all those checks and deposits if you do get audited?
Not paying your taxes...they take your house, car, etc.
Not reporting income....They put you in jail for tax evasion.
Easy choice...at least for me.
There are a lot of deductions. After Ebay fees, car expenses, storage, home office, etc. your actual taxable income is considerably less than what you earn.
Another consideration. If you get audited and you do not report your income and you get nice guys at the IRS who decide "OK this is just a hobby seller who got lucky", then you have NO deductions against the income but it is still taxable.
Much Much safer to set up as a business once you cross the "hobby" line.
At any rate, I think you jumped the gun on "assuming" most sellers do not report their income. I'm sure the TV crews and the IRS have thought of it and have checked it out themselves
posted on January 30, 2004 11:01:56 AM new
Instead of speculaitng and having us all tell you a different story. Call your SS office or the 1-800 munber and find out for sure, because if you make over the limit between age 62-65 you will be penalized big time. They will, now I am not sure, subtract for every $2.00 over the limit they will deduct $1.00 from you SS. I know you are limited but if you regulate your auctions you will be able to come out ahead. Example. if you sell $50.00 a week that is an extra $4,000 a year. Some weeks you will make more and some less so you really have to keep track. I know when your on disability you cannot make more than $500.00 a month. BTW if your a teacher doesn't your teachers retirement pay you until age 65
posted on January 30, 2004 11:24:57 AM new
Libra63 and lindajean make good points.
I'm just thinking out loud here, but it seems to me that once one loaded up with eBayable stuff cheaply enough, one could also flea-market it. I only know of one flea market in my area that requires a state-sanctioned seller's permit; all the others are pretty informal in that regard. Flea markets really are the underground economy.
I know that my Dad, after he retired, took on odd jobs for cash, like hauling loads of scrap metal to the recycler. I'm guessing some other seniors have similar opportunities. My Mom complains bitterly about having to live on SS but hasn't made much effort to supplement her income or even get out much, so I guess I know that some people do get by on it at some level of subsistence.
Ebay keeps the records forever and will happily turn them over if requested.
Anyone heard of any cases where this actually happened?
posted on January 30, 2004 01:48:18 PM new
You are right about the flea market economy, which is why so many sellers are older. Gives them something to do, and it is very easy not to report anything! It is almost all cash transactions anyway.
posted on January 30, 2004 01:56:47 PM new
yes,a few years ago a brick and mortar antique dealer was audited and ebay has to produce his sales records.
ebay is a small part of his business,it took months for ebay to produce his records but it did.
he was fined big time by IRS.(not so much ebay sales,but his store sales)
-sig file -------the lobster in the boiling pot of water who tries to prevent the others from climbing out.
posted on January 30, 2004 02:15:37 PM new
When you get your letter from Social Security they tell you how much you can make between the ages of 62-65. After 65 you can make as much as you want. I looked at one of my letters and one said I could make $10,000.00 between 52-65. That is a good sum but if you go over the amount you are penalized.
I agree flea markets are a way to go and they are looking better and better. Pay is instantly. Fees are low and just think of the face to face contact you have with your buyers. No chargebacks.
posted on January 30, 2004 02:20:44 PM new
many sellers cant get out of bed that early for flea market,here you have to get up at 3:30 and pack and drive and set the table.
if you are a hobby seller,meaning selling some of your own stuff,i dont think it is considered business.
-sig file -------the lobster in the boiling pot of water who tries to prevent the others from climbing out.
posted on January 30, 2004 05:07:00 PM new
According to our tax preparier you don't have to claim personal items. i.e. I have a very extensive bracelet collection that dates back to the early 60's. These I can sell and I don't have to claim taxes. There is not to much I purchase anymore as if I sell all my collections I would have a goodly sum and I think a lot of us have them. I have been going to flea markets since the early 60's. We had a dandy as the posters from Milwaukee can testify to. 7 mile fair. Now it is all junk. Fruits and Vegetables(literally), new avon products. glass fruit anything that is useless they sell. Well I must clarify myself,junk to me but not to everyone. They even have dog items for Ralphie.
posted on January 30, 2004 05:26:15 PM new
libra63.
7 mile fair,!!
i was there once and even considered selling there,that was many years ago.
i recalled there were not much for sale then,there seemed to be some communes nearby and some really cool looking men selling their homemade baskets.
marijuana never look so good.
-sig file -------the lobster in the boiling pot of water who tries to prevent the others from climbing out.
posted on January 30, 2004 06:41:37 PM new
Who says we have to report any of our Ebay sales to the government and what the hell business is it of theirs anyway? Oops...a sedan just pulled up out front and two guys in grey suits with brief cases just got out. I gotta go see what they want. Be back later.
The light at the end of the tunnel will turn out to be an oncoming train.
posted on January 30, 2004 07:51:07 PM new
Another way to look at itis; If you retire at 62, don't increase your SSW benefits by working, it will take about 9 years before your age 65 retirement will exceed what you have had from age 62. The flip side isa after age 65 there is no limit on your earnings. My sweetie has just tuned 70 & is an independent contractor working from her home she is grossing about $40,000.00 per annum. & her SS goes up every year. That plus her alimony is why we don't get married. LOL
posted on January 30, 2004 07:53:23 PM new
stopwhinning
It must have been a long time ago. But I remember 1968 or so when the place was jammed with sellers and buyers. Depression glass was the top product. It was a great place to pick up antique glassware. Are you from around here now? I have never sold there but I did sell at Elkhorn's very large flea and Antique show. It is in their fairgrounds and the area is so bid and so many sellers you can't make it around in a day. I like the flea market crowd and we do go early but when we sell we pack our car the day before, then up and gone by 6.
posted on January 31, 2004 01:03:19 AM new
Hi iareateacher,
Nice name LOL
Read "Reefer Madness" By Eric Schlosser.
You won't feel so bad about being in the "underground economy"
J
~~~~~~~~~~~**~~~~~~~~~~~
All the monkeys aren't in the zoo,
Every day you meet quite a few,
So you see it's all up to you.
You can be better than you are,
You could be swingin' on a star
