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on 01-26-2013 01:55 PM
Does ebay report earnings to the irs? If so, is it on an annual basis no matter the amount, or once you cross a $ threshold for the tax year, or cross a $ threshold for a lifetime, or ...? Also, what is the law regarding hobby selling vs. a true business? I have not kept track of anything as I could not care less about profits.
on 01-26-2013 01:57 PM
See your local IRS office for information. Remember, if you underreport your earnings, you may get a surprise envelope in the mail!
While thinking about that, read this:
and PayPal's info, here:
• If your activity is a HOBBY, report your income on line 21, Form 1040. You can´t deduct expenses in excess of your income, and you can only deduct qualifying expenses if you itemize deductions
• If you consider your sales on eBay as a BUSINESS, you must fill out the IRS 1040, Schedule C, at a minimum. You may deduct expenses.
• If you are selling junk from around the house, those casual sales are usually not taxable.
• If you are buying things for resale on eBay, you are a business, and your income from the business is taxable.
The IRS says:
"Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit."
If you want to see your history of sales, as shown on PayPal, try
on 01-26-2013 02:37 PM
Hobby vs business only matters if you're planning to offset losses. Otherwise, all the IRS cares about is that you must report your profits as income.
Here's the IRS's specific page for "online auction sellers":
You also should read this page from PAyPal which explains when they report to the IRS: