@pbadome wrote:Well, on a chat with an Ebay "specialist", apparently, they include canceled and returned which means that the actual $194 was added to a return and a no-pay for a grand total of $630.
A 1099 is used to report earnings which I explained on the chat. I did not earn $600 but the "system" triggered a requirement for Ebay to obtain my S.S. number, how about that?
If anyone can put a positive spin on this mess, I'm open for it.
eBay's "sales" figures have always been only that - sales. No refunds are included, so returns and cancellations are not recorded there.
But this is just the way 1099 income is reported - gross figure. To get to the actual taxable figure, you have to track your allowable deductions and report them on your income tax return(s) along with the 1099 income figure. You'll then subtract the total deductions from the total 1099/untaxed income to get the net income figure to be added to any W2 income you are reporting.
Definitely contact that accountant/CPA that @richard1rst mentioned. When I registered my business years ago, I also hired a CPA firm to assist with bookkeeping and income tax reporting. At that time, I paid a flat $300 a year and received a given set of services and time allowances. If more was needed, it would be billed at a stated rate. Very straightforward contract.
It proved to be the second best decision I've made to date (the first being to marry my wife) -- when the IRS did decide to audit my tax return, I ended up with a small past due amount related to a few receipts I simply could not find. So I wrote a check, they waived the penalties interest, and we were done. Took several visits and hours-long meetings with the auditor, but the end result was a lot less painful that expected.
And here's a fun fact that I've know for decades but never really think about: that kid who mows your yard for $25 a week should also be getting a 1099 from you, so he can report his income, deductions, and pay the net income tax (or have it added to his parent's taxes if under age 18 or not emancipated). But the IRS, while they can enforce existing tax law on every penny earned from any source, tend to focus more on the bigger targets -- the occasional yard sale or lawn mowing is going to cost more to audit and process than it's going to generate, and the IRS doesn't like ending up spending more to get less. But like most agreements state: "the decision not to enforce US tax code on any given person on taxable entity does not preclude our ability to enforce US tax code at a later date or in a different case". Just cuz I let you keep the few pieces of candy that I now know you collected from your friends doesn't mean I'm going to let you keep it next time.
Taxes cause a lot of unwarranted stress. Keep your receipts. Keep records of funds received and funds paid (and what was purchased). Keep records of your mileage (date, time, odo start, odo end, miles driven, and reason for the trip) and you'll be able to deduct some/all of that. Keep records of your yardsale purchases - date, address, # of pieces, total paid, brief list of what was purchased. If you paid sticker price, take digital pics of the item and it's price sticker to document the cost. If you negotiated a lower cost for clearing out the odds-n-ends no one if really interest in, do your best RIGHT AWAY to document what was bought and what part of the negotiated payment should be assigned to each/any given piece.
Find a decent accountant/CPA and avoid a lot of headaches.
-Bob.
