New Tax Threshold

[us-butterfly6]

I'm on a fixed income. I joined Ebay after I became widowed to supplement my small income. Most months I barely get by and a lot of months I barely sell $50 of mostly used items. Now they want to take whatever small income you made even though fees, shipping etc., eats a lot of that. So looks like we'll be working to supplement the government because after filing taxes on anything over $600 we essentially are selling things just to give it to the government. I just feel hopeless.

[1786davycrockett]

You've been an eBay member since 2013, and you have sold at least 1000 items during all those years.

Have you never reported this income to the IRS for the last nine years?

[nocoolnamejane]

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@us-butterfly6 wrote:

So looks like we'll be working to supplement the government because after filing taxes on anything over $600 we essentially are selling things just to give it to the government. 

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You’ve always had to report anything over $1, minus deductions. The only thing that changed is that now ebay also has to report anything over $600 sent to you.

If you never declared your eBay income, this is one of the reasons why the reporting threshold for payment processors was lowered.

[dhbookds]

I'm not sure why you are paying for a store....you only have 150 items up......would not seem like it's worth it.

That said.....the fees are what they are......as are taxes..........  what you CAN do is research exactly what you will pay to see if it really is worthless......  there are a lot of deductions available......

[kensgiftshop]

I've been on a fixed income for a few years now and I've reported my income every year like we are supposed to, no matter how little it was.

Just because you report it, doesn't mean you'll pay taxes on it.

[nocoolnamejane]

Ive spent the last year on a fixed income due to illness, just starting to work again and I have reported my sales to the CRA (Canadian equivalent of the IRS).

I made so little altogether anyway that with my expenses deducted, I didn’t pay extra income taxes.

I always read these posts as if people declare their income, the government will come and take it all away. That almost never happens; unless you’ve been hiding income for years I guess.

[us-butterfly6]

Yes. I have filed. Most of the items I've sold are used items for a nominal amount. And no I have NOT sold over 1000 items. 

[lamber9347]

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@us-butterfly6 wrote:

<snip> So looks like we'll be working to supplement the government because after filing taxes on anything over $600 we essentially are selling things just to give it to the government. I just feel hopeless.

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That's a terribly negative attitude to have and I do hope you can overcome that. At your age you should be more educated on how taxes actually work; one would presume you've been paying taxes all your life. Just because you sell $600 doesn't mean you turn around and give the entire $600 to the government. I do hope you feel better tomorrow. Best of luck to you....

[ms.rodriguez*]

First, my condolences on your loss.  Take a deep breath.  Remember, the total amount of money that you received is reported to the IRS but you ONLY pay taxes if you made a profit.    Let's say that you sold 1000 dollars worth of items .  You paid ebay  at least 12.9% in fees. Let's make it 13% for easier math.  So that is 130 in fees.  The items cost you 100.oo to ship.   Then you spent 100 dollars in boxes, tape, printer ink, bubblewrap, tissue paper, etc.  The items cost you 400.oo.  Did you use the internet.   You can't write off the entire amount if you use internet for chatting, games, movies.  So let's say internet fee  for ebay use only is 60.oo.

income    1,000

total expenses  is 130+100+100+400+60= 790

1000-790= 210  dollars.   You would pay taxes on 210.oo.   This 210 would be added to all of your other income and it would be taxed at whatever your tax rate is.

Anyway, start keep track of your expenses.  You can get your ebay fees from looking at MY EBAY using a desktop.   If you pay for postage at the post office, save the receipts. Any return that you did is deducted too as an expense.  My Ebay will also show how much you received in payments and also the shipping that you paid if you use Ebay shipping.

If you are selling mainly stuff around your house, most of it will sell for less than you paid.   

If you bought a new printer and camera or ipad, that too is deductible but you can NOT deduct the entire purchase since these are items that you will use for a few years so you deduct a portion of it.  

Goodluck.

[us-butterfly6]

I really shouldn't have put this post up. I just got a little overwhelmed and frustrated for a minute with things coming at me in different directions. I'm thinking more clearly now and see that just because they lowered the threshold doesn't mean I'll have to pay more taxes.

[1786davycrockett]

"And no I have NOT sold over 1000 items. "

My mistake -- closer to 600.

[onefootflipper]

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@us-butterfly6 wrote:

I really shouldn't have put this post up. I just got a little overwhelmed and frustrated for a minute with things coming at me in different directions. I'm thinking more clearly now and see that just because they lowered the threshold doesn't mean I'll have to pay more taxes.

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Casual sellers can often get their tax liability down to close to zero without cheating just from the losses they incur selling old personal items.

[itsjustasprain]

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@us-butterfly6 wrote:

I really shouldn't have put this post up. I just got a little overwhelmed and frustrated for a minute with things coming at me in different directions. I'm thinking more clearly now and see that just because they lowered the threshold doesn't mean I'll have to pay more taxes.

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Once I get through totaling up my various expenses in my selling account (like postage - Ebay fees - gas expenses - shipping supplies) the amount shown as gross income on my 1099 has dropped quite a bit. When I then add that NET income (which is the amount you actually pay tax on) from Ebay sales to my other income for the year the actual tax payment does not go up much at all.