Does Ebay or Paypal report our sales to IRS?

[janies_bizz]

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.

[hondamedic]

Everything you need to know about IRC Section 6050W

[jamyinpax]

You will need to file schedule C - business income - where you would list all your business income ( sales or whatever PayPal reported) and you will show your expenses - what is your cost in aquiring the product. So, at the end, you need to pay tax only on pure profil, not gross sales.

[hondamedic]

As long as someone else bumped an old thread and OMA can't yell at me. For everyone else:

Reporting auction income> http://www.irs.gov/newsroom/article/0,,id=174478,00.html

Hobby or business> http://www.irs.gov/irs/article/0,,id=186056,00.html

Tax tips Gobbley-Goop> http://www.irs.gov/businesses/small/industries/article/0,,id=202939,00.html

[bostongrammy]

To round out the collection of links, here's the general IRS page of info and links for "Online auction sellers", which addreses some of the basic underlying questions:

http://www.irs.gov/businesses/small/industries/article/0,,id=202939,00.html

[karp820]

For some of us, we are selling possessions we personally own and have owned for years.  In some cases we may make a profit, and in others we may actually lose money when a sale is completed.  I don't personally look upon this activity as a "business", but rather trying to dispose of property I no longer use or need, for money I can use in this poor economy. 

Don't know if anyone mentioned this...I didn't read through every page of posts.

[bostongrammy]

For some of us, we are selling possessions we personally own and have owned for years.  In some cases we may make a profit, and in others we may actually lose money when a sale is completed.  I don't personally look upon this activity as a "business", but rather trying to dispose of property I no longer use or need, for money I can use in this poor economy.

Don't know if anyone mentioned this...I didn't read through every page of posts.

The IRS doesn't care about whether YOU consider our activities to be a business.  They have their own definitions, explained here:

http://www.irsvideos.gov/Individual/PayingTaxes/HobbyBusiness

They also address this issue in the very first paragraph of the page that I gave the link for in the post just above yours.

[luckyintime]

That's awesome, since most of the stuff I sell is for other people How do they know who is keeping the money?? I shouldn't have to pay taxes on someone else's money.

casey311wvu (106 ) Re: Does Ebay or Paypal report our sales to IRS? Sep 19, 2010 07:42 PM

That's awesome, since most of the stuff I sell is for other people

How do they know who is keeping the money?? I shouldn't have to pay taxes on someone else's money.

How do they know you ask?  If you sell or pay anyone over $500.00 dollars a year, then you need to report that income to the IRS and send out a 1099 to the person that made that income from you or that you paid out for that year.  This should be done just like PayPal is now doing to all of us.  If you sell over a hundred people's stuff, and give them money over $500 bucks you need to report each one, gain their #SS, Name, Address ect.  Good luck on the book keeping on that mess.

[luckyintime]

Yep. On paper it doesn't look like I made a profit, mostly thanks to the mileage deductions 🙂

How many miles did you deduct, drive sitting at your computer and shipping from your local post office, or did you drive every package you sold too the buyers home where ever that may be in the USA Canada and Mexico areas?  lol 😉

"Just Curious"

[hondamedic]

Good morning LuckyInTime (Neat ID!) and welcome to The Part Timers Forum.

Did you have a question?

[hondamedic]

100 Snipe!

[komokwa]

Interesting way to snag a snipe......but they come in all sizes and shapes & here the early bird gets the worm !

Nice snipe Hondamedic !!

Regards from The Sniper KING !!!;-)

[luckyintime]

Thanks, and nope no questions here.

Thanks again for asking though.  🙂

Good morning LuckyInTime (Neat ID!) and welcome to The Part Timers Forum.

Did you have a question?

[everett2-half]

are my sales reported to IRS

[daffyswan]

Part-Time sellers who keep good monthly records can usually show a business loss and get a nice tax reduction.  If you're really good about it, you can game it stop selling once you reach your limit.  That's why raising taxes is such a lousy idea - it discourages work and commerce.

I quit one of my jobs because my salary put me in the alternative minimum tax category. For those who don't know - this category allows no deductions for anything - not even your mortgage interest is deductible.  Had I kept the job, the government would have taken three days pay for every 5 days I worked. I weighed the options and the government lost.

[Anonymous]

I'm sure this has been mentioned (but I didn't feel like reading all the posts). My dad (a retired accountant and my tax preparer) told me (I asked the same question) two things: 1. If you are not selling for true profit (meaning you bought the item higher than what it sells for) you don't have to report it. Part 2 was if you don't sell that many items (which was mentioned) you don't have to report it. So far (and I have only been selling since last Septmeber) I have yet to break $200 after everything is taken out (E-Bay, PayPal & shipping). So for me hittiing $20, 000 is probably not going to happen. OK just my untaxable 2 cents worth. 😄