Ebay to report income to IRS soon

Haha. While legally people should be doing this, many/most don't and paypal is just shooting them selves in the foot on this one.

 

Bastards. I knew it would only be a matter of time...

 

I don't hav a huge problm with this initially but then I just thought of somehting. eBay will probably make it essentially mandatory and they will probably charge for this feature too =/

 

Great . . . just another thing I need to keep track of now. Does anyone know what this will affect, and by that I which tax year will this affect . . .

-Disjaukifa

 

It's only if you sell A TON of stuff on ebay.

 

Are you talking about number of items are total income?

-Disjaukifa

 

Yeah im curious as well. I only sell maybe 1 item a month if that and my new profit is rarely more then 100$. Hopefully this wont affect me.

 

This is more likely the IRS pushing rather than Ebay. If not then it seems that Ebay wants to whatever it can to lose customers.

 

Total income. If you sell under a certain about you'll probably qualify for some kind of small business exemption. It's not really worth the IRS' time to audit someone if they made like $500 over the course of a year (for instance.)

Paypal could of course make this real simple, by just deducting the taxes automatically.

 

Is it Ebay or Paypal? I almost never sell on Ebay but I do on Paypal. Also, shouldn't they be calling this "revenue" instead of income? Surely it can be a loss as well. I report all my game sales income anyway though, so not too bothered.

How do they know what you paid for it?

 

GP is correct. You only need to report income. If you buy something for $5 and sell it for $10, then you need to pay taxes on $5 of income. If you sell the item for the same cost as or lower (factoring your shipping, ebay expenses), then there's no profit to report.

 

I only buy on eBay. The ridiculous fees made me lose interest in selling on there years ago.

 

There is a threshold where you are not required to report income to the IRS

I cannot recall what it is ($500? $1500?) and don't want to research it on my iPhone.

But it's based on total profit sold, not number of items.

 

Thats good to know, in terms of profit, I think my best year was around 450 bucks . . . in profit :thumbsup:

-Disjaukifa

 

Well like anything they can't tax a loss... If you bought a big collection for $2000 but sold it for $1500 you are at a net LOSS of $500...

But small business owners who have more loss than profit are targets of audits.

Therefore if you earn a living on eBay, do not write off all your income.

You will still get a form (I'm guessing 1099) for your earnings but can:

1. Stay under a certain level of sales
Or
2. Claim or write off legit expenses to reduce your net profit.

 

SOME CLARITY

from THIS PAGE

another article form FORBES.COM in 2009 can be found here

 

Because I TOTALLY never EVER sell for someone else and don't make a dime off of it. Ever.

 

This is not true in the least. You are required to file your taxes every single year, even if you lose money.

EDIT: Okay, I'm slightly off. I'm pretty sure I have to file every year as an expat (even if I lose). Here are the stipulations for non-expatriated citizens and presumably residents.

http://www.irs.gov/newsroom/article/0,,id=105097,00.html

 

If I gave the impression you do not have to file, apologies...

But I am pretty sure I was stating you are not expected to pay taxes on that transaction.

File but owe nothing = not paying taxes on the loss.

Being in las Vegas, where so many people get 1099 forms based on commission/freelance jobs it is a way to try and not get taxed and not pay taxes... Simply declare expenses to minimize tax owed.

But as I mentioned, that would get you flagged for an audit.

Yes you are expected to pay taxes on monies earned working overseas. My question to you is why you are using an American SS# while there in japan. Can you not open a sellers account and paypal without using American docs?