eBay Sellers who sell as a HOBBY cannot deduct Paypal Fees ?

[moeyt2010]

eBay Sellers who sell as a HOBBY cannot deduct Paypal Fees ?

My friend says the IRS sees big difference between those who have "Income" from eBay as a "Hobby", and those that have "Income" as a "Business".

And although BOTH must file a Schedule C as a "Business", the "Hobbiest" cannot take any Deductions at all - even eBay and PayPal Fees.

Apparently the "Business" intends to profit; the "Hobbiest" - NOT.

I am totally a "Hobbiest". I just sell my old stuff rather than tossing it in the Trash.

So I cannot deduct ANYTHING on a Schedule C ?

[ozarkjoe]

Not too sure but I know that the hobbiest can't deduct for mileage or per diem when traveling.   I would think that ebay and PP fees reduce your reportable income.  Then again, how often is this ever enforced?   I report on Schedule C as a business precisely to take advantage of all possible deductions.

[iamonourside]

From memory, always get the real answer from an IRS publication:

Sch C is only for business income, hobby income is reported elsewhere.  Typically, the IRS rules to define business or hobby depend on whether you operate in a business like manner, by such things as keep receipts, inventories, etc..  Hobbiests typically have difficulty separating hobby expenses from personal expenses.  Businesses (should) have a clear distinction.

Eventually the characterization depends on whether you in fact make a profit (revenue exceeds expenses).   If you don't eventually profit, the IRS may audit and determine that your activities are a hobby and you may owe back taxes for previously deducted expenses.

[nowthatsjustducky]

For the hobby / small time seller, wouldn't it be more beneficial to forgo itemized deductions this year, and just take the standard deduction, which I think was doubled for the greater majority of citizens?

[moeyt2010]

That's why I ask.
That IRS publication is clear as MUD.

[moeyt2010]

Trump's Tax Cut, with the Doubled Standard Deduction, applies to 2018 - but not 2017.
I've also been advised (though not by an Accountant), that any actual profit on a Schedule C is subject to a 15% Social Security Tax - and for that the Standard Deduction will not help.

[moeyt2010]

If "hobby income is reported elsewhere." Then where ?

And where would you put eBay and PayPal Fees, if not on a Schedule C ?

Now, of course I'd probably rather just ignore the Schedule C, because then no 15% Soical Security Surcharge.

And the eBay "Income" would be covered by the Standard Dedection pretty handily. For me, that would work even in 2017.

[lloydsteventaylor]

Don't deduct a net loss but include a net income

[dhbookds]

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wrote:

For the hobby / small time seller, wouldn't it be more beneficial to forgo itemized deductions this year, and just take the standard deduction, which I think was doubled for the greater majority of citizens?

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the NEW LAW doesn't concern 2017 income, it STARTS for 2018..........so what we are filing in April is not governed by it. 

First year I sold on ebay, I had sold $350...with shipping.  Took it all to the accountant.........he put it on schedule C, deducting expenses and came out with a loss.........which cannot be carried over to apply toward your other income. 

[gracieallen01]

You can get a business license - of which, one of the things you do is collect and submit sales tax to the state - for your state and then you can deduct all legitimate expenses associated with your 'business'.  You, also, have to do it 'for profit, keep books and do 'business' consistntly.  Try getting, and reading, 'Business for Dummies'.

[buyselljack2016]

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wrote:

If "hobby income is reported elsewhere." Then where ?

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Seems like hobby income, if reportable, (not all hobby income is reportable) would go on a 1040 as "other income", after you determine if you have a + amount.

Thats the line I had to use when I had jury duty income.  There was no place to deduct the expenses incurred for putting over 1000 miles on my vehicle to be in attendance.

[uncommon_movies]

Business-related expenses are entered on a Schedule C, as is your business income. This has nothing to do with a standard or itemized deduction.

[uncommon_movies]

If you are only selling off your old stuff, you are almost certainly selling it for less than you paid for it, and thus you have no profit. No business income = no Schedule C.  You can't deduct expenses from zero income, unless you're operating a business.

[buyselljack2016]

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wrote:

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wrote:

If "hobby income is reported elsewhere." Then where ?

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Seems like hobby income, if reportable, (not all hobby income is reportable) would go on a 1040 as "other income", after you determine if you have a + amount.

Thats the line I had to use when I had jury duty income.  There was no place to deduct the expenses incurred for putting over 1000 miles on my vehicle to be in attendance.

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If you are getting a 1099 then this may all be n/a.

Sure would be nice if posters would open just one thread on a subject.

[atikovi]

Do you think the IRS is going after the casual seller here selling a few hundred dollars worth of trinkets each year? I wouldn't worry about it, especially if it's stuff you already own and didn't just buy for resale.