How do you calculate your taxes?

[lark-shahn]

So basically i sell stuff and i my profit is  15-25 percent. I buy my stuff from people and resell them therefore i have no receipt. How much should i leave for my tax? 

[slippinjimmy]

It's not clear what you are asking.

If you mean how much income tax will you end up having to pay. Nobody can answer that as we do not know how much other income you have, what deductions you can take or what tax bracket you will be in after including eBay sales.

Are you single or married?

do you file a joint return or individual?

Do you have dependent children?

Do you have any income other than eBay sales?

Do you live in a State with State Income Tax?

etc. etc. etc.

The bottom  line is that if your total income is quite low your tax obligations could be ZERO if it's VERY high you could be looking at 24% plus State taxes.

I have to ask....have you ever filed an income tax return?

[luckythewinner]

How do you calculate your taxes?

I don't calculate my taxes - the IRS does. I report my income and expenses on Schedule C, and the tax form calculates my taxes for me.

How much should i leave for my tax?

I have no idea sure what you are asking. What does "leave for my tax" mean?

[soh.maryl]

Due to the number of questions here regarding what I assume to be Federal income taxes, my recommendation is to consult a tax professional.

[lark-shahn]

Yes i did. But

i have never done it selling on ebay its my first year and i wasnt sure how much should i leave for tax? I mean i buy something for $10 sell it for $18and after everything i make $3 how much of that $3 should

i leave for tax? 

[7606dennis]

I recommend that you consult a tax professional.

[powell-memorabilia]

Assume 30% in taxes.  If you underestimate, you won’t be too far off.  Overestimate, and you’ll get some money back after filing your taxes.

[dnasilver]

If $3 is all you make in a year, you don't need to file taxes. Are the items be sold as earned or unearned income? Every individual has different circumstances, your question cannot be answered without knowing your circumstances.

[m60driver · Accepted solution]

Just be honest and then work backwards. If your net profit margins are in the 15-25% range then just assume a 20% average.  Then figure out (estimate if necessary) cost of goods, Ebay fees, shipping costs, and expenses such as packaging materials based upon your 20% net.  Report all this on a Schedule-C.  As long as you are making an honest effort then there is little chance of being audited.  If you show no profit then your chances of being audited go way up.  I did not keep records this year but I am keeping records for 2022 using Google Sheets, a free spreadsheet.

So basically, say you have a 1099K showing $10,000.  You will show a net profit of $2,000 and then figure out how  to distribute your expenses of $8,000 between the expense items I mentioned above.  The actual tax owed will depend on your (combined if married) annual gross income, but should range between 15-25% ($300-$500).

[lark-shahn]

Thank you so much! This is all i wanted to hear.

[fat94]

This is why I don’t sell on eBay anymore , listing fees , final value fees , and then they want you to pay taxes on something that’s already been taxed ? No thanks 

[inhawaii]

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@fat94 wrote:

This is why I don’t sell on eBay anymore , listing fees , final value fees , and then they want you to pay taxes on something that’s already been taxed ? No thanks 

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Fees are tax DEDUCTABLE.
You DEDUCT them from your earnings.

[calicorecordsandcds]

So basically, say you have a 1099K showing $10,000.  You will show a net profit of $2,000 and then figure out how  to distribute your expenses of $8,000 between the expense items I mentioned above.  The actual tax owed will depend on your (combined if married) annual gross income, but should range between 15-25% ($300-$500).

So, I am not sure if you pay cash as you are saying there is no record?  Did you start a business account?

So your first step is to contact a CPA and let them help you.  Your second step is to based on what you posted, contact the state comptroller as you most likely will need to report income to them for taxes as well.

Third step is to do some research about how to start a business.  If you don't have receipts I fail to see how you have determined your profit margins.  You have a lot of work to do and it is very important that you keep great records.  Ebay makes it easy for us to do so.

I wish you luck I hope your next questions are to CPA and State Comptroller. 

[kh-gary]

Hi everyone,

Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread HERE if you wish to continue to discuss this topic.

Thank you for understanding.