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Community Member
Posts: 4
Registered: ‎07-06-2011

Re: Does Ebay or Paypal report our sales to IRS?

in reply to janies_bizz

i am planing to start selling things on e-bay. and i believe that if u use pay pal the irs could find out how much income you make on ebay . so what i plan to do is to incorporate and sell my inventory to [ my corporation} and sell the inventory asan agent of my corporation.

 

remember their is 3 things certainin


janies_bizz wrote:
I just started selling on Ebay and Im a little worried about reporting my extra little income. Its not that much but is there like a certain amount that I have to make for them to report or how does this work? Any help would be appreciated. Tax time is near.


life taxes death and ebay fees

Community Member
Posts: 1,763
Registered: ‎01-19-2010

Re: Does Ebay or Paypal report our sales to IRS?

[ Edited ]
in reply to 7470pamela

pamela, thanks for posting that link about the ONLINE GARAGE SALE...except it didn't work, so here it is.

Somehow, I end up posting it almost every year.   winky

 

IRS links for online sellers

 

All that kind of stuff personal used stuff is sold at a loss, right?
No profit. Just like a garage sale. So no taxes paid.

 

Seems to apply to recent posts by robinscollections315, stalebria...I'm totally not going back another page to read old posts.

 

in which case, the advice andyabby gave about Schedule C and all the rest, DOES NOT APPLY. Quit scaring people, andyabby!

Welcome to the part timers board!

 

but when I look at what amzzyhmd posted,


amzzyhmd wrote:

i make well over $20k but i don't reach 200 transactions therefore i haven't received any 1099 from paypal for past three years.. and i wouldnt want to self-report this income pay tax for this because it might jeopardize my current visa status. so in this case what's the possibility that irs ever finds out about my income. will they come and check my paypal at some point or what? how do they ever know that i made that much and never reported?


 

now THAT post looks like a tax dodger from a foreign country enjoying all the ameneties of the USA on my tax dime.

And I find myself in an unkind place.

How nice, if I could just not pay tax on the first "well over $20K" I earned....but you seem to think it's OK.

 

And you know what, amzzyhmd? 

You could probably do it legally & get citizenship in our fine country, if you cared to spend the effort.   pbfffft

Community Member
Posts: 4
Registered: ‎02-26-2015

Re: Does Ebay or Paypal report our sales to IRS?

in reply to stalebria

In searching for more information I found this blurb on the IRS website which seems to apply to you.  I hope it helps.

 

Share - Click this link to Share this page through email or social media Print - Click this link to Print this page

Tax Tips for Online Auction Sellers Online Garage Sales

If your online auction sales are the Internet equivalent of an occasional garage or yard sale, you generally do not have to report the sales. In a garage sale, you generally sell household items you purchased over the years and used personally. If you paid more for the items than you sell them for, the sales are not reportable. Losses on personal use property are not deductible, either. However, see Sales of Appreciated Assets at an Online Auction below for gain reporting.

Community Member
Posts: 2
Registered: ‎10-29-2007

Re: Does Ebay or Paypal report our sales to IRS?

in reply to janies_bizz

Here's MY spin on things.... PayPal is required under IRS regulations to issue a 1099K IF your sales are $20,000 or more in the previous calendar year AND you have 200 or more transactions.

 

PayPal states that personal money transfers are NOT included in these totals. So, if mom & dad send you $500 for that college kegger, it won't show up in your PayPal 1099K.

 

Forget about the argument that you paid taxes on the items you've sold when you first acquired them. Uncle Sam will have none of that. He wants his money. Period.

 

The good news is that you will need to file a schedule C, and in doing so, can write off postage (yes, that amount IS included in the $20,000 reported), your shipping supplies, the cost of the item in the first place, a portion of your mortgage, provided the area you sell from is used exclusively for that purpose, as well as a proportionate amount of your utilities, gas, mileage and internet access charges. Since I sell for others and keep  only a commission (paying the item owner the larger portion of the proceeds), I am able to write off the lions share of the reported income, and at the end of the day after all my write-offs, I actually show a loss rather than a profit.

 

Now, if you are the casual seller - the mom who wants to give her childs clothing or toys a second life- I wouldn't fret.. The IRS won't be looking for you for an audit, so there is no need to black out your windows or line your walls with tin foil :-)

Community Member
Posts: 1
Registered: ‎01-26-2016

Re: Does Ebay or Paypal report our sales to IRS?

in reply to lillylover238

So lets say i bought a video game for $60.00 new and also had to pay taxes. I then 2 years later sell that game for $10.00 and not only will ebay take its fee for listing, selling, and shipping but also paypal will take its fee as well. That alone is taking a $10.00 sale and now bringing it down to $8.00 (not inlcuding the cost of the package to ship the game or the gas to take to the post office) but ON TOP OF THAT the irs wants to tax me again on the item i already paid taxes on 2 years ago? What is the point? I am all for taxes but at what point does it become insane? I guess the logical thing to do would be to sell 190 items within a calendar year and make sure it is under 20k in total earnings. If you risk that, then have someone else sign up and keep selling under their name like a spouse. Seperate accounts.

Community Member
Posts: 1
Registered: ‎01-24-2016

Re: Does Ebay or Paypal report our sales to IRS?

in reply to janies_bizz
Maybe you shouldn't post on here...they will prob find out if you're telling everyone about it
Community Member
Posts: 6,995
Registered: ‎01-20-2011

Re: Does Ebay or Paypal report our sales to IRS?

in reply to janies_bizz

Re: Does Ebay or Paypal report our sales to IRS?

 

I really do hope not, as I would hate to think that looking at my pitiful sales,

could potentially cause a poor IRS agent to laugh him, or herself to death.

Community Member
Posts: 12
Registered: ‎08-04-2010

Re: Does Ebay or Paypal report our sales to IRS?

in reply to janies_bizz
I only sell my personal Items at a loss. All at a loss. Like a $ 100 pair of shoes for $10. Garage sale things and collectibles. What about EBay fees. PayPal fees, postage. This is the first I have heard. Most of my things are older than 5 years. I was mainly selling for my sons Medical expenses. Which have been eaten all of my money up. eBay never told us and either did PayPal. Ridiculous.
Community Member
Posts: 12
Registered: ‎08-04-2010

Re: Does Ebay or Paypal report our sales to IRS?

in reply to janies_bizz
I have been selling my personal Items. Most at a loss to pay for my sons Medical Expenses. These were items I sold most on pennies on the dollar. Clothes shoes Etc. they told me to print a 1099 k. Why should I have to pay taxes on my property. I paid sales taxes. eBay Fees, PayPal fees. It is personal items. I do not have a Tax number. I refuse to pay taxes on personal items.
Community Member
Posts: 3
Registered: ‎11-03-2009

Re: Does Ebay or Paypal report our sales to IRS?

in reply to amzzyhmd

Hey guys,

 

Did the paypal tax forms go out already and if not, when do they send them?

Community Member
Posts: 1
Registered: ‎01-14-2016

Re: Does Ebay or Paypal report our sales to IRS?

in reply to janies_bizz

i make well over $20k but i don't reach 200 transactions therefore i haven't received any 1099 from paypal for past three years.. and i wouldnt want to self-report this income pay tax for this because it might jeopardize my current visa status. so in this case what's the possibility that irs ever finds out about my income. will they come and check my paypal at some point or what? how do they ever know that i made that much and never reported?

Community Member
Posts: 191
Registered: ‎12-31-2015

Re: Does Ebay or Paypal report our sales to IRS?

in reply to janies_bizz
No, it means that Paypal doesn't issue a 1099. You still pay taxes on your profits.

This is not a difficult concept.
Community Member
Posts: 1
Registered: ‎01-04-2016

Re: Does Ebay or Paypal report our sales to IRS?

in reply to janies_bizz
So, if you make less than 200 sales and less than 20,000....you don't have to report it out claim it on taxes?
Community Member
Posts: 2
Registered: ‎11-07-2009

Re: Does Ebay or Paypal report our sales to IRS?

in reply to janies_bizz
Whew! Thanks I was sweating there...yeah under my total sales amount they have the entire amount listed but when I called they broke it into two groups...I will have to call them again, thanks for the reply.
Community Member
Posts: 10,984
Registered: ‎05-18-2013

Re: Does Ebay or Paypal report our sales to IRS?

in reply to mabelsgreatstuff4you

Hi Mabel, According to the PayPal FQS page, Friends and Family money received should not be counted for 1099 purposes:

 

Are personal payments that I receive counted in the total that will be reported to the IRS?

No. Personal payments that are not payments for the sale of goods or services will not be counted when determining if the IRS thresholds have been reached and will not be included on your Form 1099-K if you exceed the thresholds. However, all payments received for the sale of goods or services will be used to calculate the gross payment volume to be reported. PayPal monitors accounts to ensure that personal payments are not being used for sales of goods and services.
 
Perhaps this FQS page has been revised by PayPal, but I have not seen any revisions.  I would call PayPal back and have them look at the link I provided and ask to see the new policy that includes Friends & Family payments totals in your 1099 in writing.  If the PayPal Customer Support reps are anything like the eBay CS reps, they don't always dole out the correct information 
 


How much better life would be, if a liar's pants really did catch fire!  winking fire flame photo: smile flame smiley_fire.gif

Community Member
Posts: 2
Registered: ‎11-21-2015

Re: Does Ebay or Paypal report our sales to IRS?

in reply to janies_bizz
I called paypal yesterday because my ebay sales totaled 15,000 but paypal had me at just over 20,000...I freaked and called. The irs department at paypal told me it was because I had received the extra money in friends and family payments from relatives. I said how can they tax money that my family already paid taxes on? He told me they include that. I am reading here in another thread that amount is filtered out when paypal considers whether to send a 1099k...does anyone know for a fact which is correct??? Thanks.
Community Member
Posts: 10,984
Registered: ‎05-18-2013

Re: Does Ebay or Paypal report our sales to IRS?

in reply to henryviiofengland

@henryviiofengland From PayPal:

 

PayPal is required to report gross payments received for sellers who receive over $20,000 in gross payment volume AND over 200 separate payments in a calendar year.In order to help you understand these changes, we have prepared the following FAQs.

 

FAQs:

 

https://www.paypal.com/webapps/mpp/irs6050w



How much better life would be, if a liar's pants really did catch fire!  winking fire flame photo: smile flame smiley_fire.gif

Community Member
Posts: 1
Registered: ‎11-15-2015

Re: Does Ebay or Paypal report our sales to IRS?

in reply to nextoonew

I'm a little confused about this 200 sales AND $20,000 thing. So are you saying that if I don't meet BOTH of those criteria then the income doesn't get reported? In other words, if I sell more than $20,000 in that year but it amounts to less than 200 total sales for that same year then it DOESN'T get reported? Is that correct?

Community Member
Posts: 1
Registered: ‎10-28-2015

Re: Does Ebay or Paypal report our sales to IRS?

in reply to lovelywatchforyou

if you're selling PERSONAL items then there is no profit or loss taken....for example, If i sell my car for $10,000 and I paid $20,000 for it new and it was just my personal vehicle then no loss or gain reported...same if you sell your sweater, shoes, etc...you used your money to buy it (which you earned from your job to which you already paid tax on) so selling it just recoups that money...no big deal...so cleaning out garage, yardsale items, etc are n/a which is why they use the 200 items and $20,000 rule for reporting.

 

If however you're in teh business of selling items you bought then you need to report it and should report anything you run as a business...For example, I start a business with $1000...i spend that $1000 at local garage sales buying items i know i can sell for more online...I sell those items i collected for $2000...you now have a $1,000 gain that you need to report and pay tax on.

Community Member
Posts: 22
Registered: ‎03-04-2005

Re: Does Ebay or Paypal report our sales to IRS?

in reply to midgee1924

You mean you paid sales tax on new stuff that you buy but you don't want to pay tax on the profit later? If you are a reseller you can avoid sales tax in your state by obtaining a resellers license with your vendors. Some eBay sellers do not accept them since they have not set up a business per se and they only waive sales tax for resellers with a resellers license.  Income tax on profit only, sales tax depends upon where you live and if the seller has a presence in more than their own home state (warehouse or address or retail store). Everybody that makes money ends up paying sales tax anyway except in those states that don't have sales tax and choose income tax instead usually higher taxes based on earnings.  Most everyone pay income tax to fund highways, schools and military though our roads and bridges and infrastructure are crumbling since no one will vote to rebuild anything. No one likes to pay taxes but death and taxes are the only sure thing.