ebay as a hobby

[keziak]

Anyone here sell on ebay as a hobby, not as a business? I am trying to come up with a model in which I keep my hand in due to having stuff I can't just list on Amazon instead (such as lots). I am not quite ready to wholesale throw the stuff into a ravine. If nothing else I still have a ton of manga to do something with. Also anime series and some miscellaneous other stuff.

What does selling as a hobby mean to you? Strictly limiting your number of listings and/or the time you spend on the site? 

I am thinking of cutting back to listing only one day a week and not Sunday so I can take more of my weekends off. Maybe just 10 auctions a week or whatever. No more listing single books and gradually removing the listings. Maybe sales will end up being so low I'll finally take the plunge and close up shop. I just don't want to run two full-bore businesses anymore.

[dbfolks166mt]

@mam98031 wrote:

I am sure there are many sellers that personally consider themselves a Hobby Seller, but IRS would have a different opinion of that.

Per the IRS:

A hobby is any activity that a person pursues because they enjoy it and with no intention of making a profit.

https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax....

This is a partial quote from the introductory paragraph of an IRS publication that goes on to list 11 determining factors that must be considered together. 

     It all comes down to ones perspective and which definition of "hobby" they are looking at. Like many words in the English language there are multiple definitions/meanings for a word. You have the multiple different dictionary definitions and then of course there are the add-ons from the government, specifically the IRS. 

     I can remember when Karen and Becky were peoples names. 

[mam98031]

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@keziak wrote:

Of course I pay taxes no matter what I make.

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I didn't accuse you of anything.  I stated that I have read on these threads a lot of times where a seller will declare they are a Hobby seller because they think it will avoid paying taxes on what they earn.

If you sell to make money, you are not a Hobby seller.  If you purchase items to sell here, you are not a Hobby seller.  You are a business.

[mam98031]

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@keziak wrote:

for example everyone I know who sells on Facebook Marketplace tells me they do not pay taxes on w hat they make there and at least one of them makes a lot. I've recently started experimenting with selling there and keeping track of what I make for putting on my Schedule C for 2024. Same as for the year I made money selling to Decluttr. 

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They will eventually likely get caught.  And those IRS penalties are no joke.

[mam98031]

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@luckythewinner wrote:

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@mam98031 wrote:

I am sure there are many sellers that personally consider themselves a Hobby Seller, but IRS would have a different opinion of that.

Per the IRS:

A hobby is any activity that a person pursues because they enjoy it and with no intention of making a profit.

https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax....

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This is a partial quote from the introductory paragraph of an IRS publication that goes on to list 11 determining factors that must be considered together. 

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Yes you are correct.  I also gave the link if anyone wanted to read further.

[mam98031]

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@pcobra93 wrote:

The IRS also says that a tax "refund" is income....and must be reported next year so they can steal it back.

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Can you please provide a link to that IRS policy please.  @pcobra93 

[dhbookds]

From https://itap1.for.irs.gov/owda/0/resource/Commentary_Files_Redirect_ITA/en-US/help/trcoit.html

Taxable Refunds, Credits or Offsets of State or Local Income Taxes

If you receive a refund of (or credit for) state or local income taxes in a year after the year in which you paid them, you may have to include the refund in income in the year you receive it. This includes refunds resulting from taxes that were over withheld, applied from a prior year return, not figured correctly, or figured again because of an amended return. If you did not itemize your deductions in the previous year, do not include the refund in income. If you deducted the taxes in the previous year, include all or part of the refund in the year you receive the refund.

This information is found in Publication 525, Taxable and Nontaxable Income.

I would note that this concerns State Tax Refunds, not  Fed...........but is applicable to the Fed return.

[brightlightbookseller]

That's a very limited subset of refunds.  Not most tax refunds.

[mam98031]

That is very selective and IDK that was the point the other poster was trying to make.  I still stand by what I previously said.  FYI the conversation was about IRS, not states.

[sin-n-dex]

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@mam98031 wrote:

Having fun doing a job doesn't make it a hobby either.  I've had paying jobs that I have very much enjoyed over the years and they weren't hobbies.  Then I've had other jobs I've loved and never been paid a dime for.

"No one is going to tell me I can't enjoy my hobbies just because I sell the result of the stuff I make with the materials."  I have no idea where you got this idea.  The IRS says NOTHING about enjoying your hobbies.  Whether or not you enjoy making the stuff you make has absolutely no bearing on your taxes.  I simply don't know where you got this from.

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I pay taxes. My reference was related to work dictating what I can and can't do on a LTD leave of absense. They say I can't make money. I enjoy sewing, and eventually I'm going to sell my purses. Work can dictate I can't sell my stuff on eBay but they're not going to stop me from sewing if that's what I need to do to fill my spare time.

C.

[mam98031]

I pay taxes. My reference was related to work dictating what I can and can't do on a LTD leave of absense. They say I can't make money. I enjoy sewing, and eventually I'm going to sell my purses. Work can dictate I can't sell my stuff on eBay but they're not going to stop me from sewing if that's what I need to do to fill my spare time.

Have you looked up the rules on your disability you are getting?  There is usually some amount you can earn without if affecting your benefits.  You should really look closely at the contract.

[sin-n-dex]

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@mam98031 wrote:

I pay taxes. My reference was related to work dictating what I can and can't do on a LTD leave of absense. They say I can't make money. I enjoy sewing, and eventually I'm going to sell my purses. Work can dictate I can't sell my stuff on eBay but they're not going to stop me from sewing if that's what I need to do to fill my spare time.

Have you looked up the rules on your disability you are getting?  There is usually some amount you can earn without if affecting your benefits.  You should really look closely at the contract.

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It's self-insured by my workplace. Not a government offered LTD with standard rules.

I did read the policy (because I will need to claim when I have surgery, although in all fairness I won't be selling during this time anyway since I don't know my limitations, and once I'm well enough to pack and ship orders I'll return to work). The policy says you can not do any sort of "work" for "wage or profit", and selling on eBay is considered "work for profit", at least that applies to me since I'm selling the coin shop's items.

I spoke with a rep and they said they can audit my activities to see whether or not I can still sell while on LTD, but I've seen what happens during an audit of someone's alternate income sources and it's invasive. I say if I can sew, it's better to just make bags for fun and sell them later when allowed. (I also don't make profit on any of my sewing since I price things so cheap... it's tough to compete handmade products against mass produced stuff from the third world).

C.

[gloryglorygifts]

Facebook doesn't collect sales tax for it's market vendors? 

[sin-n-dex]

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@gloryglorygifts wrote:

Facebook doesn't collect sales tax for it's market vendors? 

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Negotiations are through messages, how do they know what you're selling and for how much?

C.

[mam98031]

@sin-n-dex 

I'm not sure what to tell you.  You are fully aware that selling on the internet puts your Disability income at risk, yet you still do it.  That is a choice you have made.  Hopefully they will never audit you, but if they do it seems you are risking a lot to sell here.

I wish you the best.

[mam98031]

I think there are different ways to sell on Facebook.  But IF the money is process on Facebook using the money processor, you betcha they are collecting sales tax and will do a 1099k if the sales reach the threshold for the form.