Tax question - does eBay report to IRS

[margarets-art]

Since you were so helpful with my previous question, here is another one that has occurred to me. Does eBay send any sort of information to the IRS on how much you money a seller makes on art sales at the end of the year? Best to know that right off the bat. Thank you for your input. Margaret a/k/a Lois-Lane-48

[poozybear]

I've heard of some people who have two eBay ids, one for business income and the other for listing personal stuff. You don't pay income tax for items from your household (think: yard sale). I guess you would also have to maintain two separate PayPal accounts then. My two IDs are connected to the same PayPal account, so if the IRS is monitoring money coming into the PayPal account, they would have no way of knowing that some came from garage sale items, and some from business sales. No wonder some people refuse to use PayPal. -- Kathy

[sunshinesketches]

And how does Paypal differentiate between revenue earned from income and the financial gift your rich old aunt sent you for your birthday? Or your mum sending money to you because you're away at university and you used all your rent and book money for beer and pizza?

[sunshinesketches]

The other thing is that Paypal doesn't ask for your social security number, so how do they even know who you are?

[blueskyfarmer]

I gave them all your names... Just kidding, just Micks.

[onekeenekat]

Here's an article from the Wall Street Journal about reporting your taxes to the IRS. This is from last week: 'If you regularly sell items on online auction sites, you may find yourself on the Internal Revenue Service's radar. Recent legislation aims to help the IRS collect more taxes from online enterprises, many of which either don't know about their tax obligations or are ignoring them, according to the agency. The provision, part of the housing rescue package that President George W. Bush is expected to sign within days, will require PayPal and other processors of online payments to report annual gross receipts to the IRS for all but the smallest online merchants.' The whole article is here: http://online.wsj.com/article/SB121737220325394931.html?mod=rss_E-Commerce/Media -- ~Kathy Co-Leader, ACA2008 ≈^..^≈.....>^..^<.....‗^..^‗Kathy is OneKeeneKat.....‗^..^‗.....>^..^<......≈^..^≈

[jjohnsonlowe]

The payment processors will be required to file a 1099 form for each merchant to the IRS and to the merchant. They won't have to file for merchants with less than $10,000 in gross sales and less than 200 transactions in a given year. I'm safe -- LOL. -- ~jana

[carpiss]

Whew....so am I. Especially with eBay sales sinking downwards like the Titanic. -- Guard with tenderness small things that have no words

[carpiss]

But I also have a business license and pay sales tax... -- Guard with tenderness small things that have no words

[poozybear]

They won't have to file for merchants with less than $10,000 in gross sales and less than 200 transactions in a given year. This line is a little confusing. Are they saying $10,000 in sales and/or more than 200 transactions a year? What if you sold 200 items at 99¢ each? -- Kathy

[sunshinesketches]

The other thing to watch out for is personal goods that you sell as well as income-earning items. For example, when you're dumping your vintage clothing collection because you A) have no social life and B) live in a town where no one dresses up. *sigh*

[jjohnsonlowe]

Karen, it seems that if you paid $200 for a dress in a store and sold it on ebay for $80, then, you could declare a LOSS, right? Or, at the very least (if you use Schedule C), use the LOSS in your calculations to determine your actual profit. Like, $200 - $80 = $120 loss on the dress Heather ACEOs sold = $125 profit (after listing fees, FVFs, Paypal fees, cat food for the model, watercolors, ink, WC paper, postage, envelopes, etc.) So, you actually only MADE $5 -- WAY less than the $10,000 that the IRS is looking for. -- ~jana

[dreams-and-creations]

I think they owe me. Im not making anything. looking at the cost to list and the final sale cost Im lucky If I come out even lol.