eBay

overshopper81 · ‎07-16-2017

Last year i was reported to irs for sales...which when i did my taxes i went over because they do NOT break apart the shipping fees! So i had to manually break out each one for the accountant...so crazy

SO MT QUESTION IS... i opened another ebay seller and seperate paypal under my husbands info. So he is the seller. Does anyone know if since we are married they will make the connection? Does it matter? I cant find any tax people who know anything about paypal in my area....any advise would help

muttlymob · ‎07-16-2017

Last year i was reported to irs for sales...which when i did my taxes i went over because they do NOT break apart the shipping fees! So i had to manually break out each one for the accountant...so crazy

How crazy is that? Having to maintain your own records for your own income, right?

Who would need an accountant if PayPal did all that for us?

How crazy it will be when you learn that you have to report your income to the IRS, whether you meet the PayPal reporting levels or not.

i opened another ebay seller and seperate paypal under my husbands info. So he is the seller. Does anyone know if since we are married they will make the connection? Does it matter?

The IRS may not quickly know that you are trying to evade taxes by selling under a different name, but if/when they do it won't be pretty.

Yes, it does matter. Income is income, reportable whether or not it ultimately is taxed. Your tax people don't need to know anything about PayPal to know this much. If they don't know it find better tax people.

the*dog*ate*my*tablecloth · ‎07-16-2017

You owe taxes whether you meet the threshold or not. You should be keeping complete records. The schedule C is really not that complicated.

good.junque · ‎07-16-2017

Was it IRS or Paypal you were concerned about as to whether they would realize that you are married to each other? I'm guessing Paypal? It doesn't really matter as you will need to claim the income and expenses for both of you when filing taxes.

Laurie

My broom brakes for all thrift stores.

good.junque · ‎07-16-2017

And, as the dog ate my tablecloth just stated, the IRS Schedule C is very easy. Get a copy and look at it for yourself, you will see what we mean.

Laurie

My broom brakes for all thrift stores.

pingpong517 · ‎07-16-2017

@overshopper81 wrote:
Last year i was reported to irs for sales...which when i did my taxes i went over because they do NOT break apart the shipping fees! So i had to manually break out each one for the accountant...so crazy
SO MT QUESTION IS... i opened another ebay seller and seperate paypal under my husbands info. So he is the seller. Does anyone know if since we are married they will make the connection? Does it matter? I cant find any tax people who know anything about paypal in my area....any advise would help

what you want to ask yourself is: Do IRS employees ever read these posts? , ummmm I wonder if they may also sell stuff on ebay and a second job, and when bored they read posts about filing and paying taxes and how to avoid doing so....uuummm Well do you feel lucky today

z50com · ‎07-16-2017

ALL income should be reported to the IRS

Anything short of that is ILLEGAL

Doesn't matter if Paypal reports you or not you should be claiming all your income to the IRS.

Are you trying to cheat the US Government out of taxes?

That's not a good idea. . .

mr_lincoln · ‎07-16-2017

@overshopper81 PayPal reports 20K or more to the IRS on each account that exceeds 20K ... it is account based to my knowledge. As for reporting taxes, sales from ALL IDs are considered taxable income.

As for breaking out the totals, that's fairly simple if you download from PayPal in the CSV format. You can sort by columns and break out shipping, Fees, monthly eBay invoice payments etc. Each one of those "blocks" can be copied in to a new Exel Spread sheet for totalling and use for the Schedule C and deductions. Shipping deducted from the total sales (that includes item and shipping) cancels out those dollars.

If one year's worth of transactions are too much to work with you can do it for each quarter by requesting a report with a date range covering each quater.

And btw, deductions on the Schedule C can also include every mile you drive to obtain inventory(thrift stores, auctions, etc.), drop packages at carrier depots, purchase packaging supplies, etc. I think the current government allowance is 53.5 cents per mile (need to check that). So say you drive a total of 14,000 miles ... you muiltiply that by .535 (53.5 cents) = $ 7,490.00 which is an expense and comes off the bottomline for tax purposes (meaning you DON'T pay tax on that $ 7,490.00).

Regards,
Mr. Lincoln - Community Mentor

partial*eclipse · ‎07-16-2017

@overshopper81 wrote:
Last year i was reported to irs for sales...which when i did my taxes i went over because they do NOT break apart the shipping fees! So i had to manually break out each one for the accountant...so crazy
SO MT QUESTION IS... i opened another ebay seller and seperate paypal under my husbands info. So he is the seller. Does anyone know if since we are married they will make the connection? Does it matter? I cant find any tax people who know anything about paypal in my area....any advise would help

Please don't come here asking a question about not getting caught evading taxes. You and your husband both need to report all of your eBay profits, whether you file separately or jointly, and regardless of whetehr you get a 1099-K from PayPal.

You need a new accountant, but it doesn't need to be one familiar with PayPal, which is just a way of accepting payments. As noted, PayPal reports your gross income; it's up to you to keep track of your expenses such as postage. You can run PayPal transaction reports on the keyword USPS to get your total postage purchased. If you look at the Schedule C as advised here, you'll see that there's just one single line entry for postage, so there's no need to separate out each purchase when reporting.

PayPal produces a handy 2-page "Annual financial Summary" Report that has a line item not only for your total PayPal income but also for total refunds and PayPal fees paid, which are also Schedule C deductible expenses.

To get your total eBay fees, you need to open your eBay invoices in My eBay > Account tab > Summary. You can open just half of them, since each invoice includes the previous month's total at the top.

You must report any net profits even if you don't get a 1099-K from PayPal, i.e, if you don't go over those reporting thresholds. Your lack of preparedness suggest to me (and to the IRS) that you had had past years with income that you didn't report. Don't be surprised if you get audits for earlier years, now that you're on the IRS's radar.

sg51 · ‎07-16-2017

As for reporting taxes, sales from ALL IDs are considered taxable income.

Not quite.

All profits are potentially taxable income.

But not all sales, let along all money arriving into a paypal account is profit. If it's not profit, it's not taxable income, nor is it required to be reported by the payee to the IRS.

The 1099-K which is issued, or not, by Paypal, says nothing at all about the tax status of the money. It is not required by law to account for the money on one's income tax filing.

However, having received a 1099-K, but not reporting it on, say, schedule C, is an invitation for the IRS to send a letter asking what is going on, or even initiate an audit. Especially if it's a substantial amount.

sg51 · ‎07-16-2017

Does anyone know if since we are married they will make the connection?

One thing we can know about this kind of question is what information is known to be in the IRS computers. Whether they use it, or whether they have additional information, we don't know.

But we do know that the 1099-k issued by Paypal contains a social security number (or other taxpayer ID number), so that's in the IRS computer.

That same taxpayer ID is used when filing, either jointly or as married filing separately.

So if two or more paypal accounts map to the same married filing(s), the connection is sure available to the IRS to find.

partial*eclipse · ‎07-16-2017

@sg51 wrote:
... having received a 1099-K, but not reporting it on, say, schedule C, is an invitation for the IRS to send a letter asking what is going on, or even initiate an audit. Especially if it's a substantial amount.

According to posts I've sen here, they IRS will just send you a bill based on your adjusted total income; of course it's always a stupendous amount because none of the seller's expenses (postage, fees, COGS) have been deducted. They woud audit if you reported questionable deductions.

notactive2021 · ‎07-16-2017

You are playing with fire. Not only are they easily able to make the connection, they might think you are attempting tax fraud. It's really easy to file it yourself at the end of the year. You cannot write off shipping costs, but you may write off materials. Such as cost of envelopes ect. Whoever told you that you could is wrong and as a result taxes were done in error. In my state, I only am required to charge sales tax to customers in my own state. Idk the law for that in your state. Either way, if you are selling routinely on ebay then you need to report it.

partial*eclipse · ‎07-16-2017

@notactive2021 wrote:
... You cannot write off shipping costs, but you may write off materials. ...

Postage costs are a legitimate expense that can be dedcted on your Schedule C.

deep-garnet-red · ‎07-16-2017

@notactive2021 wrote:
You are playing with fire. Not only are they easily able to make the connection, they might think you are attempting tax fraud. It's really easy to file it yourself at the end of the year. You cannot write off shipping costs, but you may write off materials. Such as cost of envelopes ect. Whoever told you that you could is wrong and as a result taxes were done in error. In my state, I only am required to charge sales tax to customers in my own state. Idk the law for that in your state. Either way, if you are selling routinely on ebay then you need to report it.

Whoever told you shipping costs were not deductible was way off. It's all deductible, even including mileage to the post office if you drop your items off there. Handling charges are not deductible, as that is income. However, that should be offset by cost of materials.