Your Taxes and Ebay

[iwritemax]

I have started selling on Ebay for my upcoming Disney trip and I am thrilled to have the extra money. I have made about $700.00 this year. I will probably continue and keep saving for subsequent trips after this one. My question is, I am already thinking about next year's taxes. How do you count this? I talked to someone at H & R Block and they told me that I am at the point I can't put that much $ under Misc. Income and I had to do some really big spreadsheet figuring EVERY ITEM'S Fair Market Value, Minus what the items was bought for, less shipping, fees and then come up with my profit. In other words, I was at the point I had to treat this like a business.

Can anyone shed light on this? Does Ebay send a 1099 at the end of the year? It's fun but I am not sure how to handle all this. Ebay people tell me to "contact my tax consultant."

Thanks for any info.

 

[Lewisc]

What you sold the item for less what you paid for the item less your expenses is your profit. Fair market value doesn't enter in.

Some of the tax cut programs have a small business version that might help otherwise use an accoutant.

I have started selling on Ebay for my upcoming Disney trip and I am thrilled to have the extra money. I have made about $700.00 this year. I will probably continue and keep saving for subsequent trips after this one. My question is, I am already thinking about next year's taxes. How do you count this? I talked to someone at H & R Block and they told me that I am at the point I can't put that much $ under Misc. Income and I had to do some really big spreadsheet figuring EVERY ITEM'S Fair Market Value, Minus what the items was bought for, less shipping, fees and then come up with my profit. In other words, I was at the point I had to treat this like a business.

Can anyone shed light on this? Does Ebay send a 1099 at the end of the year? It's fun but I am not sure how to handle all this. Ebay people tell me to "contact my tax consultant."

Thanks for any info.

 

[Cheshire Figment]

It is not convenient if you sell a lot, but you can go into your eBay account and select all transactions for a year. You then print them out and using an adding machine total the final values. To get the fees, take your beginning balance, add all payments to eBay and subtract the ending balance and that will be the fees.

For PayPal you can download the file to a spreadsheet and pick up all fees that way.

Also, what I do now is have a spreadsheet for all items that sell where I put, among other items: the item number, selling price, original cost, date sold, actual postage cost and, because I am a Florida resident, where shipped to and if in Florida the Sales Tax paid (if any) on the purchase and the Sales Tax collected.

Of course, being a retired CPA helps in record keeping.

Mike

BTW, eBay does not send any 1099s.

 

[lilrooster]

Man what do you all sell on ebay?

 

[DMRick]

What you sold the item for less what you paid for the item less your expenses is your profit. Fair market value doesn't enter in.

However, you have to list your gross sales, not your profit, unless you fill out a schedule C. Your misc on your income tax form, should show the total you got for the item, so it's not really a good way to to it, so go to a Schedule C. It doesn't take much time and I really advise it. Why pay more taxes than you really owe?

I too use a spreadsheet to show my fees/taxes collected for my state etc, and off course keep track of all my paper/ink, percent of use of my computer, camera, etc. Everything that will lower my tax burden. I don't think people realize how much it costs to list/sell on eBay, until they fill out their schedule C. Some people quit selling after they see the "real" bottom line!

 

[iwritemax]

I basically know what I paid for everything or what it's worth. I surely don't have to have receipts on it do I? Some of this stuff is a few years old or something I never did have a receipt on.

Right now I have a spreadsheet the figures what the item is worth(or what I paid), and I figure the total, minus all my shipping, ebay and pay pal expenses. On paper, it doesn't look like I have made much....oh, but, I am pretty satisfied with what I am making! LOL

It was suggested that I do a schedule C....so if I do does that make my E-bay selling a small business? Schedule C sounds intimidating!