Taxes

[sand*123]

Hi.  With the new limit for filing on taxes for eBay are most people filing quarterly as I heard there could be penalties if we don’t. Also do we need take out fir social security and Medicaid on the eBay profits. Trying decide if want continue Ebsy as I hsve small profits and all this is making it more complicated. Thanks Sandra 

[b86fiero]

Hello,

For accurate information regarding your personal business I highly suggest you contact a tax professional.

Best wishes

[winterpalace25]

If your profit is $400.00 or more, you will owe the IRS self-employment tax which covers Social Security and Medicare, and amounts to about 15%.  This is in addition to the income tax you will owe on all of your profit.

[susanb1872]

If you are self-employed you are subject to 15.3% for SS and MEDICARE. Whether you file quarterly or not depends on your own circumstances and as already mentioned, you need to discuss this with a tax professional.

[nobody*s_perfect]

There is no "new limit for filing taxes." There is a new federal threshold above which eBay must send you a 1099-K.  You were supposed to report your income regardless of whether you got a 1099-K. Since you don't know how this works, you apparently have been evading income tax on your eBay sales which is exactly what the new threshold is aimed at.

Take a look at IRS Schedule C and its instructions, and also Schedule SE which is where you figure out how much you owe for Social Security.  If you don't pay enough in your quarterlies, you'll owe interest.

The IRS web site has lots of useful documents which are much more accurate than any advice you'll get in an online discussion group.

[stainlessenginecovers]

You do not have to 'do taxes' quarterly') you are 'supposed' to pay them a 'guess' quarterly, but I pay them one time in October. 

$20k tax owed cost me about $200 in penalty. For $50, NOT having to deal with 'quarterly taxes' is MORE than well worth it. 

[chris13]

Last month the Turbotax CPAs created this useful article which may help answer some questions.

A Tax Filing Factsheet for eBay Sellers - TurboTax Tax Tips & Videos (intuit.com)

Tax laws can be confusing and change frequently. Not being aware doesn't signify intent to evade liability but it's great advice to do some research and take advantage of many online resources that help explain things. Once you get a feel for how your situation applies, many on the Turbotax forums offer volunteer advice just like here and can better advise you. Lots of them are retired CPAs. Then you can engage a paid tax professional armed with prepared questions and examples if you need more help.

Good luck with your taxes.

[dbfolks166mt]

     Nobody can provide you with a correct answer without you disclosing specific detailed information that you probably don't want to post on a public forum. Whether you elect to pay quarterly is based on your personal situation. Best advice I can offer it to see a tax professional.