tax

[jonrude]

If I bought 30k on Ebay why do I pay taxes on 600. that I sell, makes no sense, as you can see the sales of high dollar toys have gone away to other plat forms, I would have hoped E bay would have gone to bat for us, it is bad enough they are collecting tax for Uncle Sam on used merchandise, I guess we have to keep paying for their addiction, giving money to buy votes, how sad

[soh.maryl]

You (actually eBay) are collecting state sales taxes for the treasury of the state where the buyer has his items delivered.  This is required by the laws of that state.  You are not collecting state sales taxes for Uncle Sam.

And eBay, regarding state sales tax, did go to bat for you, but it was in vain.

The minimum threshhold for Federal income taxes reporting on eBay is, yes, $600., by law.

If you've not been reporting your eBay income in previous years, you might need to consult a tax professional.

There are many deductions that sellers can take on their eBay earnings.  Again, that's a Federal income tax situation,  not a state one.  

[monica-sells]

"...as you can see the sales of high dollar toys have gone away to other plat forms..."

your source for this is?

"Inquiring minds want to know...."

[donsdetour]

Hmm laws on reporting gross sales to the IRS changed so that the online systems have to report any over $600.00 to the IRS and send you a 1099.

Its law not ebay doing this...

[stainlessenginecovers]

So much wrong with your thinking, but here goes

1.) Amount purchased has NOTHING to do with an amount sold

2.) Ebay had NO WAY of going to bat for ANYTHING as this was a Congress decision and not up to 'voters'

3.) ANYTHING SOLD ANYWHERE where ANY TYPE of electronic payment is made, ie. Your Phone while sliding a credit card at a swap meet or garage sale, and ALL OTHER TYPES of transactions, besides cash in person, is being reported and a 1099 will be issue to that person for anything that totals over $600.

4.) Any amount over $600 was ALWAYS REQUIRED LONG BEFORE THE CHANGE IN 1099 ISSUEING to be reported on EVERY INDIVIDUALS tax return. Always

[pburn]

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@jonrude wrote:

If I bought 30k on Ebay why do I pay taxes on 600. that I sell, makes no sense . . .

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How much a person buys from eBay has nothing to do with reporting income from selling on eBay.

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@jonrude wrote:

. . . it is bad enough they are collecting tax for Uncle Sam on used merchandise . . . 

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If you're referring to buyers paying sales tax, that's not collected for Uncle Sam. Sales tax is remitted to a buyer's state and passed along to any other taxing authorities within that state, if applicable.

[maxine*j]

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@jonrude wrote:

If I bought 30k on Ebay why do I pay taxes on 600. that I sell, makes no sense, as you can see the sales of high dollar toys have gone away to other plat forms, I would have hoped E bay would have gone to bat for us, it is bad enough they are collecting tax for Uncle Sam on used merchandise, I guess we have to keep paying for their addiction, giving money to buy votes, how sad

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What does your spending on eBay have to do with reporting and paying any income taxes due on your earnings from selling on eBay? 

You do know that you were always supposed to report your income, and the only change is the requirement for eBay to issue the 1099, right?

eBay is not collecting any taxes for Uncle Sam, although it is collecting and remitting state sales taxes for you.  Since sales tax is a form of consumption tax it is paid on used goods and always has been.

Do some federal and state politicians send some tax revenue in ways they believe will buy them votes?  No doubt.  But that's another issue.

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[a_c_green]

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@jonrude wrote:

If I bought 30k on Ebay why do I pay taxes on 600.

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Because you are confusing sales tax with income tax. A buyer pays sales tax; a seller pays income tax.

[soh.maryl]

Can you explain why you believe the amount you spend on eBay as a buyer has some correlation with the Federal government's IRS requirements?  

[714ricki]

Ebay did go to bat for us. Unfortunately, the state & federal governments had different plans for taxing all online transactions regardless of platform. Contact a tax professional on how to report & pay the taxes & move on! It isn't that bad!!

Hang in there!

[femmefan1946]

The OP ( @jonrude ) has not sold in a year, based on his feedback.

However, many posters do not proofread their posts, and it is possible that he means he sold $30K  in 2021.

When an eBayer  accepts more than $600 in payments (which includes selling price, shipping cost, and Internet (state) sales taxes) eBay is required to report that total to the IRS.

The eBay can then deduct her business expenses (shipping cost, eBay fees, procurement costs, etc) from that $600 (or more)  and on her income tax, reports her profit as income.

[fgsfd52]

All of the tax stuff is very confusing to me. What I would love to know is if I reach the $600 mark, will I have to pay tax on this if it is pretty much the only income I have, and there is nowhere online that can explain this. I thought you only had to pay federal income tax if you make $12,000 or more annually. 

[luckythewinner]

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@jonrude wrote:

If I bought 30k on Ebay why do I pay taxes on 600.

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If I drive to Boston why are Granny Smith apples green?

Because one has absolutely nothing to do with the other.

[bearswatching]

Kind of confusing. What do your eBay purchases have to do with your income tax? There is really no correlation.

[richard1rst]

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@fgsfd52 wrote:

All of the tax stuff is very confusing to me. What I would love to know is if I reach the $600 mark, will I have to pay tax on this if it is pretty much the only income I have, and there is nowhere online that can explain this. I thought you only had to pay federal income tax if you make $12,000 or more annually. 

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The amount that eBay reports has absolutely nothing to do with what, if any, incomes taxes are due. It is then up to you to tell the IRS (schedule C) how much you paid to buy the item, what you paid in eBay fees, what you paid in shipping costs, etc. Those amounts are deducted from the amount eBay reports and that remainder (if any) is the taxable amount. But eBay has no way of knowing what those amounts are.

As for your statement:

I thought you only had to pay federal income tax if you make $12,000 or more annually. 

You are sort of on the right track. The amount is the question.

The IRS allows for certain standard deductions from gross income to determine taxable income. You can either use the “standard” deduction or you can itemize depending on which gives you the best deal. But the amount will vary from family to family. A married person with a bunch of kids gets much larger standard deductions that a single person with no wife or kids, over 65, disabled, etc. Then there are a whole lot of other allowable deductions to reduce your taxable income. So, yes, it is possible to earn a 5 figure income and pay no taxes at all.

So, to you and everyone else who seems to think that if eBay reports $600.00 that you somehow owe income taxes on the whole $600 - YOU ARE WRONG !

There are oh so many public tax preparing services available that you seriously need to go have a chat with them to clear up your obvious misconceptions. And, believe it or not, the amount that you pay them to assist you in your tax preparation is also a deductible expense.