Auction Information

Taxing eBay Part Deux


When my column on paying income tax on eBay profits ran it brought a wave of emails on whether you were required to report income earned from eBay sales to the IRS sparked a number of additional questions and comments from eBay sellers who were hoping that I could somehow validate that their eBay activities were mere hobbies instead of actual businesses and therefore not susceptible to IRS taxation.

Several folks argued that just because their little eBay hobby generated a little cash, that didn't make it a full blown business. It seems they consider the income from their little hobby to be financial manna from Heaven and thereby not taxable by earthly tax collectors. I've always been amused by folks who try to impress me with talk about their "little side business" but when the subject turns to taxes they suddenly refer to it as "my little hobby."

All arguments aside, the conclusion that I came to after reading each of the emails was always the same: while you may think selling on eBay is just a fun pastime and the money you're making is not reportable as income, depending on the circumstances, the IRS would probably disagree with you.

It seems that everyone likes making money, but hates carving off a piece for good old Uncle Sam. Welcome to free enterprise, folks. If you're going to come to the dance you have to pay the fiddler.

The IRS rules are clear: you must pay taxes on all personal and business income and that includes money you make selling on Ebay.

In its most basic sense, the IRS rules can be interpreted to mean that if you buy an old vase at a garage sale for $10 and sell it on eBay (or elsewhere) for $20 you made a $10 profit and therefore must report it as income and pay Uncle Sam his fair share.

In reality, if you are a casual seller who only sells a few items on eBay every now and then it's doubtful the IRS is going to let loose an army of agents to collect taxes on the few bucks you make. However, if you consistently sell on eBay the IRS may deem your activities to be business oriented and you will be required to file a Schedule C and claim the income.

As mentioned last week, the IRS uses a number of factors to determine if an eBay hobby that generates sales revenue is actually a business. These factors include:

Do you carry on the hobby in a business-like manner?

Do you spend considerable time working on the hobby?

Do you depend on income from your hobby for your livelihood?

If the answer to any or all of these question is yes, you're running a business, not carrying on a hobby, and you are responsible for paying taxes on your income.

What's eBay's take on all this? Naturally eBay is vehemently opposed to anything that might rock the eBay boat. eBay does not issue 1099 tax forms to sellers, nor does it report seller's sales figures to the IRS.

Ebay considers itself merely to be a facilitator, meaning that they provide a marketplace in which buyers and sellers come together to do business.

Furthermore, under its current system it would be impossible for eBay to issue accurate 1099s to sellers. eBay does not track if a seller actually gets paid by the buyer, so eBay has no idea how much money - if any - actually changes hands at the end of each transaction.

On the bright side, if you do sell on eBay as a business you can deduct a number of business expenses, including the cost of inventory, listing fees, shipping, envelopes, packing materials, etc.

You might also be able to deduct things like the purchase of a computer for business use, office space (even if it's a home office), office supplies, and more.

Talk to your accountant if there's any doubt as to whether you should or should not be paying taxes on your eBay earnings.

Small Business Q&A is written by veteran entrepreneurand syndicated columnist, Tim Knox.Tim's latest books include "Small Business Success Secrets"and "The 30 Day Blueprint For Success!"Related Links:http://www.smallbusinessqa.comhttp://www.dropshipwholesale.net


MORE RESOURCES:
This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news


Blue Mountain Eagle

Foreclosure auctions considered a success
Blue Mountain Eagle
Grant County earned about $168,000 from an open auction held May 17 to sell tax-foreclosed properties and about $155,000 on a silent auction with bids opening June 15 for the remaining properties. Thirty-one tax-foreclosed properties were deeded to the ...



ECM Publishers

Two Large Collection Auctions
ECM Publishers
July 1 • 11:00 AM. 460 Cokato St W, Cokato, MN. 20+ Gas Engines (hit & Miss), Maytags, alum. trailer, fire fighter collectibles, home furnishings, mower & snowblower, bike, collectibles, gun shop collector retirement, guns parts, wooden duck decoys ...



Nasdaq

China plans to introduce anonymous bond auctions system
Nasdaq
In a notice confirmed by the sources, the China Foreign Exchange Trade System (CFETS), also known as the National Interbank Funding Center, said that the anonymous bond auction system would apply to bonds with high-yield and low-liquidity ...



Minnesota Monthly (blog)

Minnesota's First Fine Arts Auction House
Minnesota Monthly (blog)
Last year, Sean Blanchet and Robert Snell met at the Minnesota Antiques Dealers Association's Antiques and Decorative Arts Show. This year, they came back, young kids in tow, and set up a huge booth together under the name Revere Auctions.



Deadspin

NBA Auctions Off What J.R. Smith Wore When He Lost What Was ...
Deadspin
A token of J.R. Smith's eternal shame is up for sale on the NBA's auction site. “He played 38 minutes and registered 10 points with 2 assists and 6 rebounds,” ...
NBA Auctions JR Smith's Game-Worn Jersey From Game 1 of NBA FinalsSports Illustrated
JR Smith Game 1 jersey up for auction; how much would you bid?cleveland.com
JR Smith's jersey from his infamous Game 1 gaffe in the NBA Finals is up for auctionCBSSports.com
NESN.com -NBA Auctions
all 54 news articles »


Ridgefield, CT Estate with Award-Winning Gardens Scheduled for Luxury Auction® June 29th
PR Newswire (press release)
RIDGEFIELD, Conn., June 19, 2018 /PRNewswire/ -- Following the successful sale of a 10-acre country home in Redding, CT, Miami-based Platinum Luxury Auctions has announced another, upcoming real estate auction in the town of Ridgefield. On June 29 ...

and more »


HelloGiggles

People are bidding tens of thousands of dollars for this single Dorito
HelloGiggles
It's an experiment gone oh-so-right and delicious. Late last week, Doritos unveiled a dinosaur-sized nacho cheese-flavored chip in partnership with Jurassic World: Fallen Kingdom (in the collaboration of our Jeff Goldblum dreams). And now, for a ...

and more »


FOX5 Las Vegas

Jerry Lewis and movie memorabilia auction at Planet Hollywood
FOX5 Las Vegas
Planet Hollywood Las Vegas Resort & Casino is scheduled to host an auction where famous pop culture items are up for bids, as well as Jerry Lewis's former belongings. Items once owned by Marilyn Monroe, Elvis Presley and Lucille Ball are expected to ...
Jerry Lewis' Daughter Shows Off Her Dad's Personal Items Going Up for Auction in Las VegasInside Edition
Jerry Lewis auction preview: From 'The Nutty Professor' to personal itemsNews3LV
'Star Wars,' Jerry Lewis, Trump items on auction in Las VegasLas Vegas Review-Journal

all 8 news articles »


Hurriyet Daily News

Turkish Treasury borrows over $1.4B through auctions
Hurriyet Daily News
The Turkish Treasury borrowed a total of 6.72 billion Turkish liras ($1.42 billion) from domestic markets on June 18, according to an official statement.
Turkey's Treasury holds auctions to borrow over $1.5BAnadolu Agency

all 4 news articles »


ColorLines magazine

Family Auctions Rosa Parks' Restored Detroit Home
ColorLines magazine
The Associated Press reports today (June 14) that Guernsey's, an auction house in New York City, plans to sell a house once occupied by Rosa Parks in July. The auction represents the latest chapter in a saga that started when the racial justice ...
Rosa Parks' home has been rebuilt in Berlin - CNN Style - CNN.comCNN.com
Rosa Parks exhibition canceledThe Brown Daily Herald
Why Buffett's son bought Rosa Parks archiveCNNMoney

all 85 news articles »

Google News

home | site map
© 2006