eBay

therosebrier · ‎03-23-2022

for the year 2021 I sold more than $600 but less than $20,000 and live in Montana. I know for 2022 you file to pay the IRS if you sold over $600. But do we claim the money if sale less than $20,000 in 2021? I read lots of articles on line and it was all conflicting. I sell items from my home I don't want anymore and some items I find at thrift stores. The articles seemed to say if it came from your house you don't mention the item, but if you bought it for resale you do claim the profit on your IRS taxes. Is that true? Also do we mention the sales if less then $20,000 in sales. Just trying to file my taxes right in a few days. Many thanks!!!! Remember I am asking about the year 2021 sales not 2022.

pburn · ‎03-23-2022

@therosebrier wrote:
for the year 2021 I sold more than $600 but less than $20,000 and live in Montana. I know for 2022 you file to pay the IRS if you sold over $600. But do we claim the money if sale less than $20,000 in 2021? I read lots of articles on line and it was all conflicting. I sell items from my home I don't want anymore and some items I find at thrift stores. The articles seemed to say if it came from your house you don't mention the item, but if you bought it for resale you do claim the profit on your IRS taxes. Is that true? Also do we mention the sales if less then $20,000 in sales. Just trying to file my taxes right in a few days. Many thanks!!!! Remember I am asking about the year 2021 sales not 2022.

Sorry, but there are really a lot of misconceptions or misunderstandings in your post. You'll get all kinds of advice from strangers on this board and most of it will conflict with the next piece of advice. Some will say you don't have to report anything, some will say you have to report everything.

Rather than take advice from random folks, you should call your state's Department of Revenue taxpayer hotline or contact the IRS if there's a federal IRS office in your town, or spend some time with a tax professional who can give you some guidance.

Good luck.

duffy4444 · ‎03-23-2022

You're operating a business on eBay, even with your items from home. The tip-off is your admission of thrift store purchases for resale.

You won't get much sympathy from sellers here who have been in compliance for a long time. I'm right next door to you in Idaho, and I've been reporting earnings almost from the start back in 1998. You'd better get into tax compliance right away, and hope that there is some form of tax amnesty in the future from the IRS over previous unreported earnings... but be looking over your shoulder for a potential IRS audit over previous years of online sales. If they want, the IRS can get all your back sales reports directly from eBay and any other venue you may have been using.

You should have been reporting those online sales for past years anyway, as a lot of successful sellers here have been doing for years (and we sleep at night very comfortably). That's the law, whether it's items for resale or your personal household goods. With the new $600 threshold for getting a 1099-K, the IRS is now flushing out those buyers who have been avoiding (translation: evading!) taxes on unreported online sales. And just in case, thinking that one is a "hobby seller" will no longer fly.

It's not as frightening as one would think; there are generous expense deductions that are allowed for Schedule C filers. You just need to figure out the original cost of household items, and start keeping receipts for those thrift store items you mentioned.

Talk to a trustworthy and reliable tax adviser about getting into compliance, if you are confused about the changes and need help. Once things are set up, it's easy to file each year.

Cheers, Duffy

gracieallen01 · ‎03-23-2022

Do yourself a really big favor, as another poster said - find a real professional who knows tax law in your state and federal and talk to them, in person, face-to-face. Talk to someone who actually KNOWS what they are talking about!

Not saying 'NO' doesn't mean 'YES'.

The foolishness of one's actions or words is determined by the number of witnesses.

Perhaps if Brains were described as an APP, many people would use them more often.

Respect, like money, is only of 'worth' when it is earned - with all due respect, it can not be ordained, legislated or coerced. Anonymous

gracieallen01 · ‎03-23-2022

Oh yes, I forgot to mention - often free advice is worth exactly what you pay for it, nothing.

Not saying 'NO' doesn't mean 'YES'.

The foolishness of one's actions or words is determined by the number of witnesses.

Perhaps if Brains were described as an APP, many people would use them more often.

Respect, like money, is only of 'worth' when it is earned - with all due respect, it can not be ordained, legislated or coerced. Anonymous

caldreamer · ‎03-23-2022

There seems to be some confusion...you must report all income earned to the IRS (even if you don't receive a 1099). You always report gross sales (purchase price + shipping). If you file as a business you can deduct expenses (EBAY fees, costs of goods, shipping costs, mileage, etc). If you file as hobby seller (you cannot claim deductions).

I strongly urge you to contact with CPA so you can understand bookkeeping required to run your business. Your state may require "business license". You need to create spreadsheet to track your inventory (assign# to every item, date acquired, description of item, cost of goods, date sold). This is critical because if you file as business you are required to provide your CPA with "beginning and ending" inventory amount.

chapeau-noir · ‎03-23-2022

Yes, you have to declare your revenue, you can also deduct your cost of goods, fees, shipping, mileage, etc. - you only pay taxes on the PROFIT after all is said and done. I'd advise a copy of Turbo Tax Home and Business - it will walk you through the entire process so you take all of your legal deductions. Tax Jar also has some good beginner advice, as does the IRS and of course your home state.

If you want consult someone, you don't need a CPA (spendy), you want a tax specialist (a bookkeeper with extensive experience with taxes) - they will pay for themselves.

If you don't do your taxes, you'll be leaving money on the table because there are so many deductions you can take. Next year you'll be able to do your own taxes because you'll have a 'template' from this year. Trust me, it's not very hard. I can barely keep track of pocket change and I'm able to easily do my taxes.

When you dine with leopards, it is wise to check the menu lest you find yourself as the main course.

#freedomtoread
#readbannedbooks

gamersbaystore · ‎03-23-2022

You should have received a 1099 in the mail already. If not, then you should be able to download it right from your ebay account under the taxes link in the payments section. If its not there, I would be contacting ebay ASAP. You are running out of time to file without penalty. If you're not ready to file yet, then consider filing for an extension.

downunder-61 · ‎03-23-2022

I enlisted the help of a tax accountant when I first started my business - and while it can be a costly venture it was the best investement I ever made.

It is also a one time thing, because once you see how things are done it is easy to follow the same template for the coming years so long as you keep informed on the various updates and changes made by the IRS (in my case the ATO).

Nothing is ever as daunting once you see it eplained.........

********************************************************************
I have been imported from Australia and this is my posting ID

714ricki · ‎03-24-2022

I would recommend talking to a tax professional....especially a tax professional who is familiar with ecommerce sales. I'm from the camp that reports all sales on my tax paperwork & pay whatever taxes are owed on the profit. If you have all your paperwork in order, then a good tax professional should be able to help you correctly file your taxes.

Good luck!

coolections · ‎03-24-2022

yes

baantiques · ‎03-24-2022

It's income, so YES.

Time to keep track of your expenses and file Schedule C. You can "lose" a lot of money on paper, so it's not as bad as you think.

You are now in the same boat as a lot of other sellers. It's not really that bad.

therosebrier · ‎03-24-2022

Thanks, This is my first year selling on Ebay since the 1990's. All I have been doing for the last several years on Ebay is buying. So there are no on line sales from the past to report. 2021 First year selling as I was clearing out my house of unwanted items. I was confused because Ebay said that for 2021 They were sending out 1099's for people who sold over $20,000 and for 2022 For people who sold over $600. So I wasn't sure if I reported sales for under $20,000 for the year 2021. I have no problem paying taxes. Just wanted to understand if I was to report the sales. I have all my receipts. Thanks for the info.

luckythewinner · ‎03-24-2022

I sell items from my home I don't want anymore and some items I find at thrift stores.

The 1099-K threshold has nothing to do with whether your income is reportable. You are a business and need to declare all of your income.

duffy4444 · ‎03-24-2022

@therosebrier wrote:
Thanks, This is my first year selling on Ebay since the 1990's. All I have been doing for the last several years on Ebay is buying. So there are no on line sales from the past to report. 2021 First year selling as I was clearing out my house of unwanted items. I was confused because Ebay said that for 2021 They were sending out 1099's for people who sold over $20,000 and for 2022 For people who sold over $600. So I wasn't sure if I reported sales for under $20,000 for the year 2021. I have no problem paying taxes. Just wanted to understand if I was to report the sales. I have all my receipts. Thanks for the info.

WOW. You've dodged a bullet by only being a buyer for previous years - that's good news in addition to having receipts for 2021. But get into compliance pronto with your 2021 filing and you'll be glad you're on the right track. There are a lot of sellers here who will be understandably looking over their shoulder because of years of dodging and evading the law (whistling in the graveyard or thinking they are only a "hobby seller", which doesn't fly anymore).

Cheers, Duffy