Ebay selling/taxes15570
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HOGLEG private msg quote post Address this user | |
| Are any of you guys big ebay sellers? If you sell a LOT of books on ebay, have you ever had to pay taxes on your sales the following year? Im pretty sure that if you sell enough, PayPal will report it to the IRS. Has that happened to any of you? And if it has, do you know how much you have to sell before it gets reported? I've sold a lot of books on ebay this year, so I am wondering what might happen. Thanks |
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 Masculinity takes a holiday.
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EbayMafia private msg quote post Address this user | |
| $20K is the reporting threshold this year. Next year it drops to $600. | ||
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 Collector
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Robert86m private msg quote post Address this user | |
| Every dollar you make in profit is taxable income doesn't matter if its 100$ or 1,000 dollars | ||
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Collector
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HOGLEG private msg quote post Address this user | |
| Well, yeah, I know that. Im selling some books at a loss, too. Im trying to sell it all before I move out of country this winter. If you sell stocks at a loss, it helps you when tax time comes |
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HOGLEG private msg quote post Address this user | |
| From 20k to $600? Thats quite a drop |
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Sebastsk8 private msg quote post Address this user | |
| As far as I know the tax changes don't go into effect until 2022, so you wouldn't receive a 1099 for online sales until early 2023 for sales made during 2022. I'm not sure how that will play out as they've been kinda vague from stuff I've read about what the cap is, before it was anything below 20k you didn't even get a 1099. Now it's anything above 600, and differing categories for different items. But I think comics will fall into the 28% tax rate category although I'm not sure if it's that rate on anything above 600. | ||
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Collector
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Robert86m private msg quote post Address this user | |
| They are working on expanding the IRS this year also to do more audits for the years to come better believe if your selling online they will hit you with an audit for prior years once they get that flag items are being sold online | ||
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Noblebeast315 private msg quote post Address this user | |
You can sell on the forum, we a don’t report to the IRS.  |
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| Post 8 • IP flag post | ||
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Sebastsk8 private msg quote post Address this user | |
| Taking a loss on an item is deductible from your net profits if you have proof of expenses(original cost, slab fees, etc) | ||
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Sebastsk8 private msg quote post Address this user | |
| @Robert86m the tax changes don't apply to past sales of course. Doesn't matter if they audit you if you had under 20k in sales in 21 or prior. | ||
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HOGLEG private msg quote post Address this user | |
| That really sucks, cause I didnt really keep records on a the things I bought over the past 9 years. And I am over the 20k threshold, so I will probably be reported | ||
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Robert86m private msg quote post Address this user | |
| @Sebastsk8 It 100% matters the IRS is aloud to audit you for the past 5-7 years this illusion of people thinking the magic number is 20k or something is a joke | ||
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Collector
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HOGLEG private msg quote post Address this user | |
| Yeah, well, I'm gonna stop selling for a while, I guess. Thanks, guys |
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Sebastsk8 private msg quote post Address this user | |
| @Robert86m 20k is their threshold for needing to report online income. They can and will not tax you on past income using a "current" tax law. That's like arresting someone during prohibition for drinking prior to prohibition. That isn't how laws work, they're not retroactive. |
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Rjman48 private msg quote post Address this user | |
| https://www.google.com/amp/s/www.cnbc.com/amp/2021/03/26/its-going-to-get-harder-to-avoid-telling-the-irs-about-income-from-online-sales.html I don't know if the new above changes pertains to pp f&f, venmo and other feeless transactions. |
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Robert86m private msg quote post Address this user | |
| @Sebastsk8 You do understand your supposed to pay income taxes on all PROFIT let that sink in for awhile they can come back at you once they pull your financials for prior years tell the IRS but I only made 19k they will laugh at you while they start hitting you with fines and penalties | ||
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 Suck it up, buttercup!!
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KatKomics private msg quote post Address this user | |
| Gather all your invoices from auction houses - all your credit card statements to get comic shop purchases - do inventory as a pool method rather than FIFO or LIFO or by individual book. Find out what expenses you can deduct (portion of house for storage [including taxes, utilities, mileage to and from post office, meals, bank account fees, comic supplies, interest charges - everything!), and go to town, bring your "profit" to zero if you can. profit =sales less expenses at the end of the year find out how close you are and buy a big ticket comic for your PC - but claim it as inventory expense = profit now ZERO!!! what's the tax rate anyway?? get your profit low enough that the cost of them doing an audit out ways any $$ they could squeeze out of you |
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Suck it up, buttercup!!
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KatKomics private msg quote post Address this user | |
| Oooo....convention tickets, hotel costs, meals -that was a purchasing trip. Statues?? also an expense since they could some day be sold Do you guys have estate tax? when you die everything passes to heirs at future fair market value and they only pay the estate tax (1% for us in Canada) - now they can sell the whole lot and make little to no 'profit' |
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Masculinity takes a holiday.
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EbayMafia private msg quote post Address this user | |
| @KatKomics I don't think US citizens are going to be able to expense inventory that they haven't sold yet. @Sebastsk8 The tax laws have not changed, only the 3rd party reporting requirements. So past revenues would be fair game. |
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Suck it up, buttercup!!
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KatKomics private msg quote post Address this user | |
| Oh..oh!!! can you claim input tax credits??? they might owe you money!!! if you buy something that will be for re-sale then you can claim the sales tax back on those items since you won't be the final user of that item. find an accountant and 1 time spend some $$ to get them to setup your books so you can do them yourself and have them list off all the things you can claim. Did you have a house party??..did you show people your comics - did you show specific ones that were for sale?? that my friend is an open house - claim the food and drink - now you may think I'm joking - but I'm not.....home builders do that type of sh!t all the time - give a tour of their house - spit out a few facts and figures (R Rating of insulation etc) and claim the party as an open house. It is absolutely amazing what type of loop holes exist out there |
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Drogio private msg quote post Address this user | |
Quote:Originally Posted by KatKomics How does that work if your expenses still don’t add up to the standard deduction? I would think you would need to have an LLC to show your “business” is separate from your personal income. |
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Sebastsk8 private msg quote post Address this user | |
| If they're treating it as a business any books purchased should be considered inventory and be deducted from taxable income. | ||
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Suck it up, buttercup!!
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KatKomics private msg quote post Address this user | |
Quote:Originally Posted by Drogio yeah..they can't force you to incorporate to sell a few books - anything you buy is now part of inventory and part of the current year expense. Up here in the north we pay no tax on any personal item sold for under $1,000...anything above that we are supposed to claim the difference i.e. sold for $1,500 - then claim $500 as taxable - but there is no reporting mechanism (cough..."honor" system...cough!)...even the books I sell though MCS are free and clear because they can send me an IRS form all day long if they want - I pay tax in and to Canada on Canadian tax rules under treaty |
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Suck it up, buttercup!!
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KatKomics private msg quote post Address this user | |
Quote:Originally Posted by Sebastsk8 man...all it's gonna take is a retired accountant who knows the rules and has very little exposure to any penalties to just tie things up in court and blow this thing up!! As soon as they say "any sales" are taxable then "any applicable expense" can be claimed a few more years till I retire and I'm in Canada - but most of our accounting rules are the same (we use the same handbook) It could be fun to have auditors just burning weeks and months of their time. |
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 Have I told you about the time I dropped off 3,000 comics at SDCC?
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Scifinator private msg quote post Address this user | |
Quote:Originally Posted by Noblebeast315 @Noblebeast315 - Keep in mind, if receiving payment via PayPal (or similar venue) goods & service, the $600 total receipts threshold will still apply next year...regardless of where the sale originated. |
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Have I told you about the time I dropped off 3,000 comics at SDCC?
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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. |
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Suck it up, buttercup!!
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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! |
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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… |
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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. | ||
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Masculinity takes a holiday.
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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. |
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