Registering with IRS

[angeldianescollectibles]

Help please to know what to do.....

I have made more than 600 so Ebay pays sales tax....

So I have to register my business with the state right? do I file for an exempt # St3 form also?

I have to get reigistered with Irs for a EIN #?

Thank you... so many people I talk to at Goodwill say I didn't do any of that...I said if you sold over 600 I think you need to.......

[powell-memorabilia]

No, you don’t need to do those things.  Remain calm 🙂

[toysaver]

All you have to do is include your sales on your income tax.  You'll get a 1099 at the beginning of the year that will have the figures eBay reported to the IRS.

[dhbookds]

You live in New Jersey........and need to check their rules.......Sales tax is handled by Ebay......but some states do have extra reporting requirements on SALES TAX.........they should have  website where you can get info.

On income tax, if you are in Managed Payments, which I assume you are, you have given your social security#, so nothing else you are "required to do".......Ebay will send a 1099 at the end of year.......  Most sellers do not "need" and EIN#........I suggest you read about it and consider your own circumstances. 

[rudy2828]

File Schedule C with your 1040, show your sales proceeds from 1099, and then deduct from that every little thing you can think of, such as original cost, postage, packing supplies (bubble wrap, peanuts, tape), boxes purchased, mileage to post office, copy paper  and toner used to print labels, - I am sure there could be others.

After all is said and done you may see you're netting very little income. Then decide if it's worth all the time spent.

I wouldn't be on here except I have a lifetime's savvy garage sale purchase accumulation, and my father left me with lots of most everything. Anything under $10 I usually donate or toss. After deducting all costs just not worth the little I net and can't get back the time spent.

Life is short - don't use it all up on ebay or any internet site.

[m60driver]

No need to file your "business" but you will need to file a Schedule C which will cost a bit more ($100) then say using the basic version of TurboTax ($40).  Just be honest and show some profit as the IRS is not likely to audit small sellers as long as they are being honest and report normal profit margins.  Last year I just assumed my net profit margins were about 30% and worked backwards from there.  Just use your own spreadsheet as some of Ebay's reports combine income and expenses in the same column which renders them useless for filing taxes.

[mega-ma-roo]

Please see the information on this site that eBay set up for sellers with tax questions:

Ultimate Tax Resource for eBay Sellers | TaxAct Blog

[nobody*s_perfect]

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@angeldianescollectibles wrote:

Help please to know what to do.....

I have made more than 600 so Ebay pays sales tax.... No, this has nothing to do with sales tax. Sales taxes are per state; IRS is federal income tax.

So I have to register my business with the state right? No, in most states you do not.

do I file for an exempt # St3 form also? Sorry I've never heard of that form though I've been paying income tax on my eBay sales for many years. You do not have to collect sales taxes; eBay does that for you.

I have to get reigistered with Irs for a EIN #? No, you don't.

Thank you... so many people I talk to at Goodwill say I didn't do any of that...I said if you sold over 600 I think you need to....... Why are you getting tax advice at Goodwill??

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As others on this thread have indicated, you are way overthinking this and setting yourself up for a lot of unnecessary complications.  You don't need an EIN, just use your Social Security Number. File Schedule C along with your 1040; read the instructions for that form, to get a better idea of how the IRS sees this.

[lacemaker3]

@angeldianescollectibles,

I'm sorry, but you are misunderstanding this. You are mixing up sales tax and income tax, they are completely separate and unrelated to each other.

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I have made more than 600 so Ebay pays sales tax....

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eBay always collects sales tax, on every sale where sales tax is required, but you don't pay it. The buyers pay the sales tax, and eBay collects it for the buyer's state and sends it to the state.

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So I have to register my business with the state right? do I file for an exempt # St3 form also?

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You don't have to, no. You can, but it's not required. The St3 form you mention, is the form for applying for a sales tax exemption # in New Jersey, where you are located. You only have to do that if you want to be able to purchase things for your business without paying sales tax on them. You should speak to an accountant, who has experience keeping books and filing taxes for an online seller. They will be able to tell you if you should register as a business or not. It depends on your particular situation, and the rules in your state.

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I have to get reigistered with Irs for a EIN #?

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Again, not necessarily. The EIN is for filing income tax, if you want to do that separately from your personal tax return. Even if you decide to register your business with the state, you can still file as an individual sole proprietor, if that is what makes the most sense for you. If that will save you money, so you need to speak to the experienced account about this.

All of this is true no matter how much you sell, whether more or less than $600. The new $600 threshold just means that eBay has to file an information form to the IRS and your state. It doesn't change anything about filing taxes for your business.

There is more information here about filing income tax as an online seller. You can read these so that you will have a better idea what questions  you need to ask your new accountant, and what information they will need.

https://community.ebay.com/t5/Announcements/eBay-and-TaxAct-partner-to-help-you-navigate-new-Form-10...

https://blog.taxact.com/ebay

[angeldianescollectibles]

Thank you for your feedback...

I was hoping it was going to be better then what is has been.

I wanted to stay home to take care of my Mother and Father but unfortunately it is not working out.

Life is too short I agree 100% and yes it is taking too much of my time.

Take care,

Diane

[luckythewinner]

I have made more than 600 so Ebay pays sales tax....

If eBay processed more than $600 in payments, eBay files a 1099-K form with the IRS. That has absolutely nothing to do with "sales tax".

So I have to register my business with the state right?

Your state will tell you whether you need to register your business with your state. Each state is different.

do I file for an exempt # St3 form also?

The ST3 is an exemption form to avoid paying sales tax on inventory purchases. That has nothing to do with you selling on eBay.

I have to get reigistered with Irs for a EIN #?

You can report business income under your SSN. You do not have to have an EIN.

so many people I talk to at Goodwill say I didn't do any of that

Lots of people say lots of things. But it sounds like in this case, they are probably right.

I said if you sold over 600 I think you need to.

Lots of people say lots of things. But it sounds like in this case, you are probably wrong.

[simply-the-best-for-you]

Just a comment on the Sales Tax Exemption form.  If you are a large seller, then not paying sales tax on your inventory may be beneficial.  I have the equivalent in my state.   It's your choice though & it can complicate things.  

If you choose to get one, that *may* then require you to file a State Sales Tax return, even though the amounts would be 0 because eBay handles sales tax for you.  Many states require you to file the return if you have the exemption.   

None of that has anything to do with Federal Income tax, which is where the 1099 comes into play.