Net Auctions and Auction Information |
|
Is Selling On eBay Just A Hobby Or A Real Business?
Q: I made extra money selling things on eBay last year. These were items I picked up at yardsales mostly. My husband says I am responsible for paying income tax on the money I made, but I disagree. This is just my hobby, not a business. What do you think? -- Gladys A. A: With so many people selling on eBay these days this is a question I get all the time. To many eBay sellers the thought of running an actual business is about as appealing as getting negative feedback, so they go out of their way to convince themselves that selling on eBay is really "just a hobby" and therefore, should not be susceptible to income tax laws. While you might think selling on eBay is just a hobby and the extra money you're making is not reportable as income, depending on the circumstances, the IRS just might disagree with you. 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 mean that if you buy a 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 lose much sleep over 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. The IRS uses a number of factors to determine if a hobby is really a business. These factors include: 1. Do you carry on the activity in a business-like manner? If you conduct your eBay activities in a business-like manner, i.e. you keep business records, track profit and loss, keep a separate checking account, etc. then whether you think so or not, your hobby is really a business. 2. Do you spend considerable time working on your hobby? If you put considerable time and effort into your eBay sales, the IRS may contend that you do so for profit and not fun. It seems the folks at the IRS don't believe in doing things strictly for pleasure. My guess is, neither do you. If you weren't making money selling on eBay I doubt you'd bother getting up at 4 a.m. to hit all those yardsales. Then again, maybe you would... :o) 3. If you depend on income from your eBay activities for your livelihood? If so, it's a business, not a hobby. There are a number of other factors the IRS uses to determine if a hobby is really a business, but that covers the basics. You can learn more at the IRS website at www.irs.gov. What's eBay's take on all this? eBay is vehemently opposed to anything tax related (especially the forced collection of sales tax, which is a whole 'nother issue). It's understandable that eBay is not a fan of the IRS since trying to enforce tax rules on buyers and sellers would undoubtedly be detrimental to the way eBay does business. eBay does not does not issue 1099 tax forms to sellers, nor does it report seller's sales figures to the IRS. eBay considers itself a faciliator, i.e. they provide a marketplace in which buyers and sellers come together to do business. However, since eBay is not directly involved in the transactions that take place between buyers and sellers, it would be impossible for eBay to report sales figures. Furthermore, eBay does not track if a seller actually gets paid by the buyer, so they have no idea how much money actually changes hands, making it impossible for eBay to issue accurate 1099s to sellers. 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. I'm not accountant (nor do I play one on TV), so please do not take any of this as tax advice or legal opinion. Talk to your accountant if there's any doubt as to whether you should or should not be paying taxes on your eBay earnings. Here's to your success! Tim Knox Small Business Q&A is written by veteran entrepreneur and syndicated columnist, Tim Knox. Tim serves as the president and CEO of three successful technology companies and is the founder of DropshipWholesale.net, an online organization dedicated to the success of online and eBay entrepreneurs. Related Links:
MORE RESOURCES: The Cheyenne Supercomputer is going for a fraction of its list price at auction right now - Engadget European Hydrogen Bank auction provides €720 million for renewable hydrogen production in Europe European Commission Online auctions aren't just for distressed properties anymore in metro Detroit Crain's Detroit Business Police to auction off abandoned vehicles this week The Ithaca Voice Pharrell Williams's First Car Auction Is Filled With Vintage Classics, From De Tomaso to Lancia Yahoo Entertainment Oliver Abnos’ Kansas City properties are up for auction Kansas City Star Muhammad Ali’s Los Angeles mansion up for auction KTLA Los Angeles This Rare and Desirable Garage 56 Camaro Is Selling At Henderson Auctions Collector Motor Series Yahoo! Voices Wine, auctions, burger – for a cause Ukiah Daily Journal John Lennon's lost 'Help!' guitar to be on display in Nashville before auction. How it was found Tennessean Will the May auctions have a spring in their step? Apollo Magazine Interior Department Proposes Offshore Wind Sales in Oregon, Gulf of Maine US Department of the Interior Federal government seeking feedback ahead of Gulf of Maine offshore wind auction • New Hampshire Bulletin New Hampshire Bulletin Chandler Motor Speedway sold at auction again – Inside INdiana Business Inside INdiana Business WALIZER SALE BILL | Auctions | theprogressnews.com Clearfield Progress Lori Bergman honored at CASA of River Valley benefit auction in Bolingbrook Shaw Local News Network Southern and Nordic projects triumph in EU green auctions PE Media Network Join Overlake Medical Center's Bandage Ball 2024: Online Auction Now Open Downtown Bellevue Network Power outage halts Salinas Valley Fair Kick-Off auction King City Rustler The Woodlands Christian Academy celebrates 30th Anniversary with 'Now & Then' Auction and Gala hellowoodlands.com Variety Was Key In Doyle's American Fine & Decorative Arts Auctions Antiques and the Arts Online BOEM Proposes Offshore Wind Area Auctions in Gulf of Mexico and Oregon The Maritime Executive Auction brings Irish roots Maple Lake Messenger Another giant Disney auction set for Joel Magee collection Orlando Sentinel George Harrison's sitar sells for more than $66000 at auction Rural Radio Network Heritage Global Partners: online auction Fish Farmer Magazine - Academy auction | School | webstercountycitizen.com Webster County Citizen 74th Hopkinsville Rotary Auction Chair Says Community Will See Results From Auction Proceeds wkdzradio.com AT AUCTION JWC Media 2002 Ford Expedition With Just 5K Miles Up For Auction Ford Authority Cantwell Ups ACP Money in Updated Draft Spectrum Auction Bill BroadbandBreakfast.com Wireless Providers, Others, Disagree on Allocating Spectrum Without Auction Authority BroadbandBreakfast.com Al Capone's "sweetheart" gun is up for auction again — and it could sell for over $2 million CBS News Old Friends Auction Halters Ready for Absentee Bidding Thoroughbred Daily News Six DFW Office Assets Headed to Foreclosure Auction The Real Deal Travis Kelce Calls Taylor Swift 'My Significant Other' and Auctions Off Eras Tour Tickets at Patrick Mahomes' Gala Yahoo Entertainment Planned Oregon and Gulf of Maine auctions open new opportunities for floating offshore wind Marine Log Cheyenne supercomputer is now up for auction XDA Developers Booming Beloit Auction buys Hanson's property | Business News | beloitdailynews.com Beloit Daily News 'Misconceived': SC Registry returns Centre's 'clarification' plea on spectrum allocation via non-auction routes The Indian Express Woman's club silent auction | Local News | gettysburgtimes.com Gettysburg Times Watch Worn by John Jacob Astor on the Titanic Sells for $1.4 Million The New York Times Taylor Swift, Travis Kelce auction off Eras Tour tickets at Patrick Mahomes charity gala KOAT New Mexico Race Worn Gear, Plastic and More: 2024 St. Jude Love Moto Stop Cancer Auction Now Live Racer X Online Notes: Whatnot Launches Multi-Day Auctions; Baseball Card Bat Knobs; Alcaraz in Topps Deal; New Ohio show Sports Collectors Daily Highly collectible Roman coin commemorating the opening of the Colosseum comes to auction Numismatic News Geoffrey Bell Auctions' Spring Sale: extraordinary rarities await Canadian Coin News Travis Kelce, Taylor Swift Auction Eras Tour Tickets at Patrick Mahomes' Charity Gala Bleacher Report Charity Auction to Offer Racing Interest in Coach Clint BloodHorse.com Belmar Auction Secures Concession Lease for Taylor Pavilion, Generating $198000 in Revenue TAPinto.net US government puts retired Cheyenne supercomputer up for auction DatacenterDynamics Art Glass Gleams In Heritage Pursuit Of Beauty Auction Antiques and the Arts Online |
RELATED ARTICLES
How to Win on eBay I've bought over 100 items on eBay over three years and am ready to share my knowledge of how to win at eBay and buy from reputable sellers.1. Garage Sales, Flea Markets, and Special Events... Oh My! The activity chart is an ingenious way to find, in order, events happening in your community throughout the day. Plug in 'www. Can You Really Make Money Selling New Release CDs & DVDs On eBay? Being an active eBayer, I am often being asked about products to sell. A common question is "Where can I purchase products such as new release CD's DVD's and Video Games for Playstation and X box at a 75% to 100% discount. Profitable Paper Piecing on eBay--Part 1 Why sell paper piecings on eBay?eBay is a great way to make a steady part-time or full-time income from a hobby that you love! Selling paper piecings has its ups and downs, but overall it is a rewarding and lucrative venture.Getting and Understanding An eBay AccountTo get started selling paper piecings on eBay, you will need to set up an account. eBay The Mega Marketplace For Everyone eBay is one of the world's largest market places with over 35 million visitors per day. That first sentence is worth repeating because I want you to realize that eBay gives you the ability to reach a customer base of millions and millions of people which is beneficial to you. Everything You Need To Know About Ebay Money Making Opportunities Ebay money making opportunities are simply the best thing to come along since the wheel. Seriously, everybody from grandmothers to middle school kids are cashing in on what's been called the $14 billion ebay pie. From Ebay Zero To Power-Selling Hero: What It Takes Have you ever wondered what it takes to be "the best of the best"; to outcompete everyone who tries to dowhat you are doing--and to keep them guessing exactlywhat it is that makes you so much better?If you've ever owned a commercial website before, youknow who these people are: they're the ones who sell the same product as you, but make $200,000 each year doing it. They have top rankings on search engines, flocks of loyal visitors, and a mailing list with500,000 subscribers. Your eBay Business - 8 Ways To Insure Its Success I don't know if you've ever noticed, but it seems like every week or two we read about another Powerseller going out of business.If you want your auction business to be a long-term success, then it's important that you plan now for it's continued growth. Why Its a BAD Idea To Promote Hot Selling Products on eBay Do a quick search on Google, Yahoo, or your favorite auction resource site, and you'll quickly discover there are several software programs targeted to vendors who want to promote hot selling products on eBay.The infatuation with hot selling products exists because sellers believe if you target items that have a robust sales pattern, you'll have a better chance at profiting on eBay. eBay Listing Service : Make Managing Your Auctions Easy Do you want to have a lot of auctions going but don't have time to keep track of them all? Trust me, you're not alone. With more and more people making significant portions - if not all - of their income from their eBay auction websites the need has arisen for many people to have someone manage the listing of their auctions for them. Maria's New Lifestyle: Short Story About The Benefits Shopping On The Net Has Given I've got this strange friend; her name is Maria. Maria's always been a little weird but now things have gotten unworldly altogether. 12 Tips To Make Your eBay Business More Profitable Sometimes it's the simple things that can make your eBay business more profitable and run smoother. Here are twelve things you can do that will lead to more sales and increased profits on eBay. How To Sell On Ebay & Keep Your Shirt Have you ever been delighted after a huge sale on Ebay. . Earn Money Now from Selling Childrens Items on Ebay Kids Items You Can SellClothes, toys and videos are good money makers on eBay.Go to eBay and look up a "lot" of size six girl's cloths. How To Cut Your eBay Fees By More Than 90% Now, are you ready for the REAL TRUTH about selling on eBay?It's simple; don't list too many items for sale using their auction format. Instead, set up one of their stores. 3 Unusual Formats For Auctions on EBay eBay users are accustomed to only two "standard" formats forsales on eBay: either the 'regular' auction which involvesbidding and waiting; and the Buy It Now, which is an instantpurchase.But there are three other formats that are less well known. How To Profit Using eBays Saved Search Feature Did you know that eBay will help you locate products you can buy cheap, then flip for a quick profit? No? Then listen up, because I am about to let you in on a little known feature of eBay that can literally stuff wads of cash in your wallet in less than 24 hours.This is an eBay tool that I use every day to locate products that I can buy and resell or buy cheap and keep for myself and my family. eBays Hot Selling Books, Find Out Which Books Sell & How To Find Them Selling books on eBay can be a very lucrative business! There are eBayers who sell only books and make a nice little income doing it. Where do they get these books to sell? At thrift stores, estate sales, flea markets, book fairs, yard sales, library sales, grandmas attic, etc. Royal Memorabilia -Smart Trading and Fake Dodging This is my second article about trading royal memorabilia on eBay and other online auctions. We're going to explore just what items are really tradable, how and where to find your stock and mention some definite pitfalls to avoid. All Terrain Vehicles (ATVs) Sell Well On eBay ATV auctions are healthy markets on eBay. All terrain vehicles have changed in the last few years (naturally) and the major change has been from one person ATVs to two person models. |
home | site map |
© 2006 |