Ebay selling/taxes15570
 Have I told you about the time I dropped off 3,000 comics at SDCC?
|
Scifinator private msg quote post Address this user | |
Quote:Originally Posted by Sebastsk8 @Sebastsk8 - Aside from "They can and will not tax you" typo, you are not accurate in you assumption or logic. This current tax law is that we ARE required to self report. It just so happens that ebay and other are not REQUIRED to issue a 1099 unless we cross the threshold of 20k with 200 + transactions. If one sells 19k with 201 transactions or 21k with 199 transactions this year, no 1099 but that person is still required to report such on his/her taxes. Next year, the 1099 drops to $600 regardless of how many transactions. Why next year? Because...most will not realize the pickle that congress put them in, with the supposed pandemic relief bill that was passed early this year, until AFTER the Nov 2022 mid-term elections. So, is it a change in our income reporting requirement? Technically, NO. Practically speaking, Yes, in that it will force reporting conformity. And again, yes, the IRS is fully free to audit your 2021, 2020, 2019 etc tax returns to verify whether or not you reported your ebay income, even though ebay and paypal may not have been required to issue you a 1099. |
||
| Post 26 • IP flag post | ||
 Suck it up, buttercup!!
|
KatKomics private msg quote post Address this user | |
Quote:Originally Posted by EbayMafia 100% you claim for what you haven' sold yet - all companies do it - you also pay on sales you haven't collected the money for yet - just part of business. past revenue could come in - all depends on the law - wish my memory was better..there was a case where the wording was such that a company tried to not pay tax because they were outside of the 200 mile from shore in the ocean - the government just re-wrote the rules and made them retroactive - government as bast@ards like that!.... They could for instance say they audited you this year and you owe $XX and since you were to self report before they will just assess you $XX for XX # of years -now it's up to you to prove you didn't rather then them prove you did! |
||
| Post 27 • IP flag post | ||
 Collector
|
KYDU private msg quote post Address this user | |
| Speculation/investment holding inventory is a different expense from depreciating inventory available for sale right away. (Or else every business would just buy gold with their expected profit instead of paying taxes). Your legal obligation is to pay taxes on ANY net income even if it’s a lemonade stand. Of course you can also claim all your expenses related. Hotel, flights, meals, car, even part of your rent, etc. They don’t bother if it makes senses but keep in mind banks (at least here in Canada I think) are required by law to report any 5 figure deposits, wires, transactions etc… Best to pay your taxes as there are lots of options to defer, expenses things. That’s why you keep hearing about rich people who don’t pay taxes. Most tax systems encourage you to reinvest to add to the GDP which makes currency stronger, more attractive etc… |
||
| Post 28 • IP flag post | ||
 Collector
|
Sebastsk8 private msg quote post Address this user | |
| @KYDU it would be virtually impossible for them to differentiate between speculative purchases and resale purchases though really, since you're reselling comics and that's the same thing you'd purchase for speculative reasons. | ||
| Post 29 • IP flag post | ||
 Masculinity takes a holiday.
|
EbayMafia private msg quote post Address this user | |
Quote:Originally Posted by KatKomics Gonna have to disagree. Cost of Goods in a non-speculation business is purchases plus or minus the change in inventory from beginning of tax year to end of tax year. So if you bought $50K and inventory grew by $10K...cost of goods is $40K. Quote: Originally Posted by KYDU Good point. Even in a regular business inventory would have to be declared obsolete or otherwise unusable in order to be expensed from what I understand. |
||
| Post 30 • IP flag post | ||
|
Suck it up, buttercup!!
|
KatKomics private msg quote post Address this user | |
Quote:Originally Posted by EbayMafia that may be....I've been in operations vs reporting for 20 yrs now. It would also depend on how you carried the value of your books no?, not really sure how one would handle inventory that appreciates in value. We have a mix of standard and actual costs....any inventory carried at standard cost gets revalued the following fiscal to the new standard cost - would that be the same as cover price and then a gain or loss at the start of the next fiscal to the new FMV? Don't think you would want to revalue every year though - either way yes I wasn't thinking - you could not expense all your purchases - but a very good portion of them and then tack on everything else you can think of I bet as individuals rather than companies we would easily drag our profit to zero. example. I've sold $2500 in comics so far this year....I've also bought 200 books (actually more but they aren't in the excel yet) and have paid for 34 books to be pressed and graded, tack on shipping to MCS, MCS fees, mileage once a week to my comic shop, a portion of my house hold expenses (just on the sqft storage for 9k books) any conventions I go to or memberships etc. etc....I can drag my yearly 'profit' to a loss real easy - how many years can you carry a loss forward in the US (I think 20 yrs for non-capital losses in CAD)...and if year after year is similar loss then basically you never have a profit - sales yes - but this tax is on profit and as a collector who sells a few books now and then I won't generate a profit unless I sold my whole collection in 1 go. Even then..if I have a few years of losses to apply and then auction house fees it may be minimal to no actual profit...or I die and leave it to the family and the estate tax brings them in at the new cost base and only pays 1% estate tax on that new base value - any further sales only generate profit if they appreciate in value from that day forward ( so they should sell right after I die to not generate a profit and keep all but 1% of the $$$!!!) again though...I've been in operations vs reporting for too long but I'm still fairly certain you could have many sales and easily show no profit - and most Joe Blow collectors not actually running a business would perpetually be in the "business loss" or non-capital loss position so may never generate enough sales to reach profit |
||
| Post 31 • IP flag post | ||
|
Masculinity takes a holiday.
|
EbayMafia private msg quote post Address this user | |
| @KatKomics I agree with most everything you are recommending except the Inventory issue. Most of us who report sales for tax purposes will not be reporting a balance sheet or inventory amount. The reporting will be based on the items sold, it will be Selling price minus expenses. It will not matter if we bought other comic books or gold or collectible watches with that money. But as others pointed out, anyone reporting income from sales for the first time should be careful not to get too greedy or too clever. The over-riding goal should be to avoid doing anything that inspires an audit of previous years sales. |
||
| Post 32 • IP flag post | ||
|
Collector
|
KYDU private msg quote post Address this user | |
Quote:Originally Posted by Sebastsk8 Maybe, possibly. When you are given a business license it is with the intrinsic expectation that you are going to contribute to economic activity in that area. You would have to price those books at a reasonable sellable price in a reasonable timeframe. (Quickly) Most businesses put everything up for sale usually in days of receiving at a price that will move. Not hold onto hot books for a year. It’s not a coincidence that Boxing Day here is most business tax year end. They are dumping inventory even at a loss which they can write off rather than taking the tax hit. Of course if you’re selling lot’s and generating tax revenue and hiring people these things help you look better. In any case you don’t want to give them any ammo to come after you. This is a discussion most people lose. |
||
| Post 33 • IP flag post | ||
 Collector
|
Doc_Cop private msg quote post Address this user | |
| Bottom line...I will refrain from selling on eBay going forward and stick to friendlier venues such as IG, the CBCS forum or out of my garage! Nuff said! | ||
| Post 34 • IP flag post | ||
 I'm good with splotches.
|
Nuffsaid111 private msg quote post Address this user | |
Quote:Originally Posted by Doc_Cop This!!!! |
||
| Post 35 • IP flag post | ||
 Collector
|
Yoosh5492 private msg quote post Address this user | |
| Ive moved most of books from ebay to MCS. It has been so much better. By end of year I'll probably only have a handful of books left for ebay. | ||
| Post 36 • IP flag post | ||
 Collector
|
Murm private msg quote post Address this user | |
| Question I’ve had a few thousand in sales on eBay this year let’s say $5000. Will eBay be sending me a 1099 come tax time? | ||
| Post 37 • IP flag post | ||
|
Collector
|
Sebastsk8 private msg quote post Address this user | |
| @Murmonster not for this year, first 1099 for under 200 sales/20k would be sent early 2023 for the 2022 fiscal year. | ||
| Post 38 • IP flag post | ||
|
Collector
|
Murm private msg quote post Address this user | |
| @Sebastsk8 Awesome thank you!! | ||
| Post 39 • IP flag post | ||
 Collector
|
moodswing private msg quote post Address this user | |
| @Murmonster Depends on your state. Several places are 1k or $600 now. You are suppose to claim the income anyway. For all the people saying to just sell on IG or forums. Any payment processing company will have to report your sales/income. Cash seems to be the only way around this. |
||
| Post 40 • IP flag post | ||
|
Suck it up, buttercup!!
|
KatKomics private msg quote post Address this user | |
Quote:Originally Posted by moodswing would e-transfers work? guess the downside is if there is a dispute then you can't make a claim through paypal etc. |
||
| Post 41 • IP flag post | ||
|
Collector
|
Murm private msg quote post Address this user | |
| @moodswing I’m in Maryland | ||
| Post 42 • IP flag post | ||
|
Collector
|
Sebastsk8 private msg quote post Address this user | |
| I would think paypal transfers wouldn't apply as they can't prove its related to a sale, but then you have no recourse in case of potential scam etc. Paypal g&s is really the only way to be safe about that.. |
||
| Post 43 • IP flag post | ||
|
Collector
|
moodswing private msg quote post Address this user | |
| @Murmonster Look up your state thresholds. I think Maryland might be $600. |
||
| Post 44 • IP flag post | ||
 Collector
|
Trespa68 private msg quote post Address this user | |
Quote:Originally Posted by HOGLEG Well...in the state I reside in the threshold has always been $600! So I have been paying the taxes for years! |
||
| Post 45 • IP flag post | ||
|
Collector
|
Murm private msg quote post Address this user | |
| @moodswing Will do thanks!! | ||
| Post 46 • IP flag post | ||
This topic is archived. Start new topic?