01-07-2009 08:44 PM
12-26-2012 10:03 PM
I'm not an accountant, but one is allowed to make hobby income.
And one is supposed to report it as income.
12-27-2012 06:25 AM
12-27-2012 08:58 AM
It begs the question, if you don't pay the taxes due on your
eBay income, does the IRS open an UID... do you get an
invisible strike, if you don't pay up? How many strikes are
you allowed to rack up, before they throw your butt in Jail...
Just wondering ?:|
01-01-2013 07:00 AM
Bump
01-02-2013 04:03 PM
They would audit you b4 they threw you in jail.Now if you were making reportable income as a tax id business that may be different
01-20-2013 10:47 AM
...
And one is supposed to report it as income.
http://www.irs.gov/uac/Is-Your-Hobby-a-For-Profit-Endeavor%3F
The following factors, although not all inclusive, may help you to determine whether your activity is an activity engaged in for profit or a hobby:
With April 15 fast approaching I thought this thread needed a bump.
01-21-2013 07:34 AM
So I've read all these posts and it still seems very confusing to me. Before I take all my info to a CPA, which will cost $, I'd like to try to have a better understanding.
I just got my 1066-K from Paypal, and they are saying I need to report this income. My situation is that I'm a Trading Partner, so 90% of my sales are not my own items and I only receive a fraction of the actual payment I receive. So even thought I've done $25K in sales (for example), I've only actually made $2500 profit. The 1066-K amount also doesn't take in to account all the eBay fees and expenses it takes to run a part-time business. I was just wondering if anyone else is in this situation and if they have any more info.
01-21-2013 08:04 AM
The 1099-K just reports your entire PayPal income. It's up to you to keep records for deductions and expenses, from postage to eBay/PayPal fees, to the amounts that you paid to the owners of the items for which you acted as an agent.
Before you meet with the accountant, look through IRS Schedule C and the instructions, to get an idea of how the IRS looks at the allowable expenses. Schedule C is where you report the PayPal income and then deduct everything else, to show that your profit was only $2500. Only your profit is reportable income.
The IRS also has lots of useful pages for small businesses. Surely somewhere in this thread those have already been referenced, including the basic page for 'online auction sellers":
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Tax-Tips-for-Online-Auction-Sellers
01-22-2013 02:08 PM
Just got my first ever 1099 from PayPal so be aware they are being sent out. It will take some paperwork to figure it all out as postage is included as part of your income!!! Glad I kept good records!!!!!!!!
01-22-2013 04:42 PM
hey ausrob,
it looks like you went over 200 payments for the year and that is why you got 1099ed.idk what all the fuss is about this paypal clearly doesnt want this to effect every merchant ,thats why the 20,000.00 /200 is the rule.if you fall under that guideline you are not required to report to the irs.you can if you want,thats the individuals choice.but why would you?
01-22-2013 06:11 PM
it looks like you went over 200 payments for the year and that is why you got 1099ed.idk what all the fuss is about this paypal clearly doesnt want this to effect every merchant ,thats why the 20,000.00 /200 is the rule.if you fall under that guideline you are not required to report to the irs.you can if you want,thats the individuals choice.but why would you?
For the love of God, will you people stop giving out tax advice that might get people busted by the IRS???
What kind of fool thinks that the government lets you sell $19,999 worth of stuff on eBay and NOT report your profits?
It is NOT, repeat NOT the individual's choice. If you make even $1 of profit, it doesn't matter what your total sales are, that profit is part of your TAXABLE INCOME.
01-22-2013 06:50 PM
... paypal clearly doesnt want this to effect every merchant ,thats why the 20,000.00 /200 is the rule.if you fall under that guideline you are not required to report to the irs....
you can if you want,thats the individuals choice.but why would you?
Those reporting thresholds ($20K, 200 transactions) were set by the federal legislation not by PayPal. They set the bar for where PayPal has to send out 1099-K's, not where sellers have to report their income. The legislation was passed as a first step in catching up with online merchants who avoid their tax obligations; clearly there's a long way to go.
01-22-2013 07:09 PM
Well that makes no sense prior to 2012 it wasn't required at all.Then they make it 20.000.00/200 and everyone else should too???Why not just require it,.?? Talking about paypal ??
01-23-2013 03:23 AM
Well that makes no sense prior to 2012 it wasn't required at all.Then they make it 20.000.00/200 and everyone else should too???Why not just require it,.?? Talking about paypal ??
Of course it was required for YOU to report your income. That hasn't changed. The only change is that the IRS is trying to catch the worst offenders (tax evaders) by having PayPal issue a 1099 to sellers over $20k.
If you haven't been paying taxes on your eBay profits, you're a tax evader, and you're subject to back taxes, penalties, and possible criminal charges.
01-23-2013 05:39 AM
Thanks for the clarification.I still dont get why prior to 2012 it wasnt required by legislation that paypal not report sellers earnings,all sellers earnings???Thats the part that makes no sense.Its not like ebay is some small town eCommerce(paypal) establishment.