Taxes and Ebay?

[currincomics]

Just wondering, as I will join the selling side of ebay in '04. I was curious since there is no tax when you sell your home(love that since I'm a contractor, live in it for 2 years, sell it and it's tax free money), or when you sell a car to say Carmax. So, do you get taxed on your ebay earnings since it is an "auction". Thanks ahead of time for any replies-and Happy New Year!!!!

[kryptonitecomics]

If it's a business then I would say legally, you should pay taxes on your ernings (a lot don't). If you are just selling off some of your own stuff like most of us do, then I don't claim that money on my taxes.

 

I fuigure that I paid my taxes up fron't for most of this stuff, so why should I have to pay again if I sell it. That may not be legally correct, but it is going to be tough for the IRS to try to track all of the auctions on Ebay, Yahoo, etc.

[shadroch]

Paying sales tax on purchases does not mean you can skip paying income tax on sales.Doesn't work like that.

If I or you can look at every transaction any seller on e=Bay does,how can you possibly think it is tough for any Tax enforcement agency to do the same.Unlike doing a local show,internet sales leave huge paper trails.

Thats the bad news. The good news is that you are responsible for taxes only on the profit you make,not the entire amount.

Since most modern books sell for way less than cover price,there is no profit to declare,and the paper losses from the sale can be used to offset profits from the sale of older books.

You can also deduct any expenses you occur,such as supplies,price guides,AOL fees,conventions,ect,ect...

As a start-up business concern,the IRS will allow you to stay in business at a loss for several years before they declare it a hobby and disallow your deductions.

[towards2112]

Black market mentallity....

 

[currincomics]

Are you saying you don't pay taxes on the earnings?

[aardvark88]

In Canada, u are supposed to pay taxes on the profit if the item or set (e.g. sold as #2-10 lot) realized over $1k Cdn. Else underground economy.

[uclapeterg]

To clarify, you can have a business run at a loss for 3 of the next 5 years before the IRS will start questioning on whether it's a "hobby" (no expenses are then allowed).

 

If you are running ebay as an everyday "business", I suggest you start filing a Schedule C or set up your own corporation.

[FlyingDonut]

On the advice of my tax preparer, I include my eBay selling income under my Schedule A on my personal taxes. I report everything, unfortunately, and therefore am on the up and up. The upside of this is that I get to write a lot of things off - my computer, my website, my travel, etc. etc. The downside is that I'm paying The Man in April.

[uclapeterg]

Schedule A is itemized deductions -- did u mean to say Schedule C (Business Income and Loss)?