Power Sellers Unite

psunite · Joined: 27 Jan 2005 Posts: 6213 Location: Columbus OH

IRS may consider eBay sales taxable income
link to article

Ann · Joined: 06 Mar 2005 Posts: 143

I was never aware that Ebay sales WEREN'T considered income. Isn't there a law that any income over $600 a year is supposed to be reported? Why shouldn't people who are using Ebay as income/extra income pay taxes just like the rest of us?

I can see where if you are selling off personal yardsale type items that you just have sitting around and don't make any profit on them or very little then there's no income to report there. But, there are a lot of Ebayers who are buying and reselling items for the purpose of profit and that should be reported.

Ann

deco333 · Joined: 20 Feb 2005 Posts: 133

An interesting side note.

When a person files a fraud report with the USPS and the Internet Fraud Division of the USG, it is cross referenced with the IRS.

So scammers open themselves up for more trouble than they realize. :shock:

2ndhandrosefrommo · Joined: 23 Feb 2005 Posts: 456

Hi,nice article. I guess I'm one of the stupid ones for all these years. From the time I first started selling online I have paid taxes on every penny. Rose told me that no one claims it,but I told her that there will come a time and where would I get the money then to pay all the past due taxes. Now 4 1/2 years later I'm glad I did it the way I did. E-You,Later!

Ann · Joined: 06 Mar 2005 Posts: 143

Same thing here! Payback could be hell. It's worth the time and cost now to save a big headache later. It is only a matter of time now, with Ebay's profits and huge revenue constantly in the spotlight. Uncle Sam will get his share. Can you just imagine if/when he gets ahold of Paypal's info?!

Ann

2ndhandrosefrommo · Joined: 23 Feb 2005 Posts: 456

Hi Ann,what is going to get me is when it takes hold they will tell people from now on you have to pay. Then I will have to hear the I Told You So from Rose. But better safe then sorry! E-You,Later!

Ann · Joined: 06 Mar 2005 Posts: 143

I thought the same thing, but you know if the feds get the chance to go back and dig up your past in order to fine you, they will. What happens if you get audited and haven't been turning it in? My accountant says they can review all of your bank records.

Ann

deco333 · Joined: 20 Feb 2005 Posts: 133

Quote: › docWrite("quote") What happens if you get audited and haven't been turning it in? My accountant says they can review all of your bank records.

Isn't the limit to go back only 7 years? Or is there no limitation for that? Your account should know,right?

8) <----posting in disguise so the IRS doesn't recognize me.

PS, I do claim it all. LOL

elgato · Joined: 24 Feb 2005 Posts: 17241 Location: Texas

Please don't get me started on the Infernal Revenue Service!--Got audited several years ago and it was a nightmare--I was not in the online business at the time (major construction) yet it still cost me $1300.00 because the person preparing my taxes (my ex) had their head elsewhere (besides their shoulders)--IRS can and will, if provoked, go back 7 years--You must keep all records and receipts for ALL purchases and expenses--Certain states are attempting to pass laws to where you MUST claim all online income, less shipping cost, which is still another from to fill out--As posted above me here it's best to be totally honest and claim all income whether it be online or elsewhere--An IRS audit for a small business is like going to the dentist and having all of your teeth extracted without the aide of novicain (please check my spelling)--Best advice is to locate an experienced tax prep who knows their business in the online business, claim every penny, pay tax on that penny and be able to show proof-->elgato

Ann · Joined: 06 Mar 2005 Posts: 143

The joke of it is that if the states do make you turn it all in less postage.... what about your Ebay fees, PP fees, cost of item, etc?

I looked up an accountant in the phone book, called her, found out that she is the county auditor as a day job! Was going to run, but decided to embrace her. Who better to have guiding you. Says she comes to any audits you may have. :)

I save receipts AND credit card statements. She says the irs loves cc bills as they don't lie. lol

Ann

elgato · Joined: 24 Feb 2005 Posts: 17241 Location: Texas

Good idea Ann--Never hurts to have fiinds in the government--Best type of tax prep people are former employees of the Infernal Revenue Service--They tend to hate their former job for some reason--At one time I figured it up and the average small businessman or woman pays somewhere near 40% of their net income in taxes every year--Don't ask me how I came up with this way back in the 90's--But if you figure every gallon of fuel you pump into your vehicle is taxed by 60% it is kind of staggering when totaling up the percentages--8.75% for sales, 60% fuel, 35% federal, etc...Don't look at the overall numbers--Look at the percentages--It'll make you want to consume vast quanities of alcohol!-->elgato

elgato · Joined: 24 Feb 2005 Posts: 17241 Location: Texas

Sorry Ann--That was government friends not fiinds-- :oops: --You asked about paypal and listing fees?--Those should be deductible--Cost of doing business--Anytime you are charged for a service, that service is taxable per state law here in Texas--Check with your new tax prep buddy there and see what laws apply to you in your own state--Every state is different--Best bet is to claim and pay tax on all income and keep receipts--There is nothing in this world to make you smile more, than when audited by the IRS and them to owe you $$$$ in the end-->elgato

Ann · Joined: 06 Mar 2005 Posts: 143

Don't get me wrong. I know PP and Ebay fees are deductible. I was referring to the person who said that the gov is thinking of making people turn in ALL income including ebay sales minus postage. I replied, what about the other fees.

Ann