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Please help...............

So paypal notified the IRS that I made a little over 22k in 2017. They are saying I owe 9k in taxes. However that shouldn't be the case correct. First off, the ebay fees and paypal fees should be deducted from that 22k correct? However, my main concern is the shipping costs. I don't have any receipts from the shipping costs from that year but can't I figure that out on my own. I could look at all the transactions from that year and figure out the shipping company I used (fedex, ups, usps, etc.), the weight/size of the item, and the buyer location. Would that be sufficient enough or will they not accept that?

Message 1 of 52
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Please help...............

Your best bet is to hire a tax attorney.
Message 2 of 52
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Please help...............

oh boy roughly how much will one of those cost for a matter like this? Even if they get the price down I'll still probably end up paying around 9k after attorney fees and whatever I would owe the IRS huh lol

Message 3 of 52
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Please help...............

Unfortunately that’s the downside to not keeping up with your accounting 😞

She ❤︎ Her ❤︎ Hers
Message 4 of 52
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Please help...............

What you need is a real good reputable accountant and let them take care of it.

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Please help...............


@2015.goubl wrote:

So paypal notified the IRS that I made a little over 22k in 2017. They are saying I owe 9k in taxes. However that shouldn't be the case correct. First off, the ebay fees and paypal fees should be deducted from that 22k correct? However, my main concern is the shipping costs. I don't have any receipts from the shipping costs from that year but can't I figure that out on my own. I could look at all the transactions from that year and figure out the shipping company I used (fedex, ups, usps, etc.), the weight/size of the item, and the buyer location. Would that be sufficient enough or will they not accept that?


If you bought your shipping labels through eBay or PayPal you can get the details from PayPal, if you paid for the postage at the post office in cash and didn't keep the receipts you could still cobble together a figure but it might not withstand an audit.

 

 

Paranoia strikes deep
Into your life it will creep
Message 6 of 52
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Please help...............

yea I definitely screwed up but I'm just hoping that I can get the shipping costs factored in because that will obviously drive the income way down just wondering if they will accept what I proposed I tried calling the IRS earlier but after waiting 45 minutes I had to give up I'll try calling again

Message 7 of 52
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Please help...............


@2015.goubl wrote:

So paypal notified the IRS that I made a little over 22k in 2017. They are saying I owe 9k in taxes. However that shouldn't be the case correct. First off, the ebay fees and paypal fees should be deducted from that 22k correct? However, my main concern is the shipping costs. I don't have any receipts from the shipping costs from that year but can't I figure that out on my own. I could look at all the transactions from that year and figure out the shipping company I used (fedex, ups, usps, etc.), the weight/size of the item, and the buyer location. Would that be sufficient enough or will they not accept that?


PP notified that you were paid a little over 22K through PP.

 

It was your responsibility to to track expenses/make deductions/keep records when reporting your income that year. (and any year).

Message 8 of 52
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Please help...............

If I did purchase shipping through ebay, it would have been very, very few I think I started purchasing labels through ebay at the beginning of the 2018 year

Message 9 of 52
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Please help...............

You are going to need help.  Professional help would be best.  An attorney or an accountant is a wise move.

 

You need to start looking for receipts.. lots of them.  Did you use online shipping for your packages? If so you should be able to find that information.  You also should look into yearly paypal reports.  That is a good place to look for expenses.  Also check your credit card statements or bank statements.  You must have some records of expenses.  You should be able to get copies of statements if you have not kept them.  

 

You are entitled to deduct for expenses:  For example, shipping costs, fees, cost of goods, cost of supplies.  There are lots of expenses that sellers typically show on schedule C of the tax form.

 

 You will probably need to provide proof of those expenses and they might take your word for it at this point.   You can deduct what you can prove.

 

And before you get another letter, you might want to take care of 2018 income tax if you haven't yet.  The same will apply.  But those are questions and things you need to work out with a professional.  No one here can advise you on the specifics....

 

And start pulling together 2019 records as you will need those as well to file your taxes properly.

 

It is a good wake up call to others that think that they can sell online and not report their income.

Keep every receipt, claim every expense, claim every bit of income.  You will sleep better at night.

 

 

 

 

Message 10 of 52
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Please help...............

...I am assuming that you didn't use eBay's shipping? 😳  You could find the shipping costs on PP if you did...

 

That is one on the reasons I like using eBay's shipping... + my label is pre-made for me...no filling out names & addresses.

 

I was (am) always curious as to why some sellers don't use the program?... Click & ship...Drop & go... easy peasy

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Please help...............


@nocoolnamejane wrote:

Unfortunately that’s the downside to not keeping up with your accounting 😞


That's true, and I am definitely no expert at that either, but still... 9K in taxes on 22K in income? That seems a bit... steep?

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Please help...............

thanks for the info, doesn't paypal only report over 20k in sales to the IRS? I could of swore that I read that somewhere and I thought I was monitoring that back then but apparently not. For 2018 I didn't sell over 20k worth of stuff so I should be ok correct?

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Please help...............

yea that threw me off too that's almost have of the profit! (if 22k was the profit but after fees its most definitely not of course)

Message 14 of 52
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Please help...............

First of all don't panic...

 

After you file Schedule C, that becomes part of your annual income...same thing happened to me a few years back with a company I self-employed with...

 

After all my deductions, the cost of products I had to buy, the expenses in my home, including my home office, gas, car expenses ( my car was used strictly for my business ONLY), meals when I went out, etc..and combine with my standard deductions, I paid only around 1000...then the IRS ( who are pretty easy to work with) got me on a payment plan and it was paid off in 10 months..

 

All I did was go to HR Block...

Message 15 of 52
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