01-07-2009 08:44 PM
02-23-2012 04:01 AM
I have yet to break $200 after everything is taken out (E-Bay, PayPal & shipping).
A reply to myself I meant to say $200.00 in one month not in total. 😮
02-23-2012 09:52 AM
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.
Again, not correct. Deductions are still allowed, it's just certain types tha are targeted. Hope you fired that accountant who did your taxes! Quitting a 6-figure job just to avoid paying taxes boggles my mind.
02-23-2012 03:46 PM
KansasGirl wrote: "This is not enitrely correct. Part-time ebayers cannot show a loss year after year. A business has to show a profit in some years, or else it's considered a hobby."
The IRS allows 4 consecutive years of losses before a business can be classified as a hobby. Keeping meticulous monthly records allows you to stop selling in year 5 after showing a small profit.
glorianna11 wrote:
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.
KansasGirl wrote: "Again, not correct. Deductions are still allowed, it's just certain types tha are targeted. Hope you fired that accountant who did your taxes! Quitting a 6-figure job just to avoid paying taxes boggles my mind."
My husband - a tax attorney for a large corporation - does our taxes. I'm also in a different category bcause my business is a LLC or Limited Liability Corporation. And that high salary I earned was effectively confiscated from me by the government. Because of the long hours and responsibilities, I needed an expensive wardrobe, a cook, a housekeeper, and someone to run errands and shop. Since my children were too old for a babysitter and none of the household help considered teens their responsibility, mine were left on their own. Under the AMT, none of these expenses were deductible. As I wrote before, I was working 5 days a week and the government was seizing 3 days a week worth of my earnings. Quitting that job has resulted in zero change in my standard of living but the quality of my family life has improved enormously. The government got too greedy and in the end, it lost.
02-23-2012 05:21 PM
KansasGirl wrote: "This is not enitrely correct. Part-time ebayers cannot show a loss year after year. A business has to show a profit in some years, or else it's considered a hobby."
The IRS allows 4 consecutive years of losses before a business can be classified as a hobby. Keeping meticulous monthly records allows you to stop selling in year 5 after showing a small profit.
...
This IRS memo on "Business or hobby?" says, "The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years,"
http://www.irs.gov/newsroom/article/0,,id=169490,00.html
" .... Quitting that job has resulted in zero change in my standard of living but the quality of my family life has improved enormously. The government got too greedy and in the end, it lost."
Only if the vacancy created by your departure was left unfilled.
02-24-2012 02:15 AM
...My husband - a tax attorney for a large corporation - does our taxes. I'm also in a different category bcause my business is a LLC or Limited Liability Corporation. And that high salary I earned was effectively confiscated from me by the government. ...
LOL, didn't realize I was suggesting firing your hubby!
Anyway this is apples and oranges, the payroll tax on LLCs has nothing to do with the alternative minimum tax. Maybe your hubby just didn't want to mess with the S corp payroll taxes since he's more familiar with C corps.
Boston's right about the 3 out of 5 years hobby stuff...I was too lazy to look up the link ; )
02-24-2012 06:07 AM
"Only if the vacancy created by your departure was left unfilled."
Actually, thery got tired of hiring and firing replacements, so they split my old job up, hired three people to do my old job and in total are paying less than 75k. They're also having trouble meeting govt regulations and getting hit hard with fines. After two years I get called about once a month to do free lance consulting for them.
02-24-2012 06:12 AM
Kansas,
When did the subject of payroll taxes creep in? All my remarks were abvout the federal income tax and the negative impact it has on government revenues. John Locke calls a greedy government an illegitimate government and calls for its overthrow.
02-24-2012 05:37 PM
Hi, I am curious... does the $20,000 & 200 transaction limit get calculated every January? So every January my PayPal account is checked to see if it hits the limit and then resets to $0?
02-25-2012 05:28 AM
https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/IRS6050W
Hope this helps.
02-26-2012 04:43 PM
Can I just claim the amound I get when I take my yearly total Payments Received and then subtract my total Payments Sent and also subtract total Paypal Fees. Everything I resell, I buy and send payment through paypal. So if anything I would probably be reporting more than I should since that wouldn't account for what I bought and paid for in prevous years and resold this year. And it also wouldn't subtract the money I spend on shipping.
I guess what I am really asking is how exact do I have to be? Do I have to submit every transaction or will my general equation above work fine and then I can try and subtract shipping costs?
02-26-2012 05:41 PM
Can I just claim the amound I get when I take my yearly total Payments Received and then subtract my total Payments Sent and also subtract total Paypal Fees. Everything I resell, I buy and send payment through paypal. So if anything I would probably be reporting more than I should since that wouldn't account for what I bought and paid for in prevous years and resold this year. And it also wouldn't subtract the money I spend on shipping.
I guess what I am really asking is how exact do I have to be? Do I have to submit every transaction or will my general equation above work fine and then I can try and subtract shipping costs?
That won't work at all. You need to talk to an accountant. If you're audited by the IRS, they won't appreciate your proposed strategy.
05-06-2012 01:19 AM
MY FRIEND,
IF YOU MAKE 200 TRANSACTIONS, OF $10.00.
YOU MADE $2000.00, YOU WILL BE REPORTED.
THAT MEANS, ALMOST EVERY BODY WILL BE REPORTED.
THAT $20,000 GROSS INCOME IS B.S.
HAVE A GOOD DAY
JOHN M.
05-06-2012 05:07 AM
Good morning my friend.
PayPal reporting criteria> https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/IRS6050W
These new rules apply to sellers who receive over $20,000 in gross payment volume AND over 200 separate payments in a calendar year.
Hope this helps!
05-06-2012 06:30 AM
Hmmm, since I report my eBay sales as part of my daily receipts since they're part of my store's income anyway, and I make my living from my store, I wonder if there's anything new in there that I need to know... I'm guessing probably not, but I am thinking I should probably have my accountant person skim through that just to make sure we don't end up getting a surprise we don't expect....
12-26-2012 07:44 PM
I'm not an accountant, but one is allowed to make hobby income. If we actually run business selling stuff on ebay there would be many many write-offs. Just think of it! Buying the item, storage, gas for car, insurance, computer, printer, boxes, tape postoffice (driving to , again more car expense.) Did I mention wear and tear on your car? And the portion of car & medical insurance one can deduct. Also, let's not forget the eBay fees and PayPal Fees — there quite high. The list goes on and on. So, when we all have to be businesses instead of hobby type, many will drop selling on eBay...and they know it!