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  #1  
Old 09-12-2008
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Exclamation Taxes? Do you pay your tax for Ebay?

How many of you file and pay taxes on your ebay income?

I don't report my income from ebay.

BooMer
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Old 09-12-2008
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Not yet I don't.

But when Paypal starts reporting income to the IRS in 2010 (or 2012 I cant remember) I will have to re-evaluate my selling practices.
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Old 09-15-2008
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So how do you go about getting the money from paypal? If you send it to your bank account thats the paper trail the IRS needs.
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Old 09-15-2008
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I claimed about half of what I made last year I claimed mostly the money I transfered to my bank.
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Old 09-15-2008
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The way I see it is why claim what was transferred to your bank, unless you make crap loads of money, for all the IRS knows you sent a money order to paypal and then proceeded to transfer.
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Old 09-16-2008
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Right now the issues of how the taxes will be calculated are still up in the air, I do not think the IRS has nailed this down yet. As far as the state goes, you should look up the rules for "Mail Orders" as to when you are supposed to collect sales tax.

Now as far as the Tax on the "profit", well there are a hundred different ways around this. For example: Did you sell some household items? Anything the your previously bought for personal use? If so well if you sold it for less than you originally bought it for, then it is a loss. If you are going to report the income that you make off of ebay make sure that you report all the expenses that are attributed to that sale as well as your time, etc.
This is also a good reason why you should create a business in the state that you live in. My advise would be to incorporate your business and not do it as a sole prop. as you will get personally nailed for any mistakes, Hide behind the corporate shield. So if anything goes wrong tax wise it is limited to the corporation.

Now before someone comes around about items and depreciation of value, well that is another part of the ball game but for most here that is something AFTER they protect themselves from the thieves at the IRS. Key thing to keep in mind is expense everything against the business so that you have no profit to pay taxes on. You will just pay the tax on the payroll (which I think is illegal and the the IRS has no right to take but that is for another day).

For example: I currently book all my expenses for my dogs (Food/Vet) against the company.. Why you ask, Simple they are my "Security Dogs" that watch over the inventory and the office.
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Old 09-30-2008
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Quote:
Originally Posted by Here We Go Again View Post
But when Paypal starts reporting income to the IRS in 2010 (or 2012 I cant remember) I will have to re-evaluate my selling practices.
Do you have any documentation to support that things will be happening on either dates?
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Old 09-30-2008
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A quick Google search found this:

Quote:
The payment processors will be required to file a 1099 form for each merchant to the IRS and to the merchant. They won't have to file for merchants with less than $10,000 in gross sales and less than 200 transactions in a given year.

And they won't start reporting until 2011, giving the banks and the merchants a couple years' head start to make sure everything is in order.
Tax Report - WSJ.com
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Old 09-30-2008
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If u sell in high volume of over $1,000 a month of sales u must report your taxes.
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Old 09-30-2008
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I don't get it. The IRS merely has to watch bank accounts that get $10,000 or more in deposits a year.

Also, you should pay or taxes as if you don't you could end up not just with a fine, but going to jail.
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Old 09-30-2008
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Well now we have a general idea what to do about it. If anything
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Old 09-30-2008
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use your paypal debit card, money never goes through the bank.
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Old 10-01-2008
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myIonU, hmmm that explains why the IRS is after paypal.

You generally should try to avoid doing anything that gets you in jail for tax evasion. Getting a fine is one thing, but the IRS can send you to jail for years.
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Old 10-06-2008
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Quote:
Originally Posted by Here We Go Again View Post
Not yet I don't.

But when Paypal starts reporting income to the IRS in 2010 (or 2012 I cant remember) I will have to re-evaluate my selling practices.
What difference will that make? Doesn't your bank report the deposits you're getting from paypal when you withdraw?
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Old 10-06-2008
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I reported mine because after all my true and make believe deductions I still qualify for income tax credit with all of my children so after filing I make out being paid about $3,000 from uncle sam. If you where going to have to pay money out of pocket to the IRS there are many ways to avoid it, you just need a good accountant.
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Old 10-06-2008
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I was reading this thread and wondering if anyone has a link to the paypal debit card thing to cash out the money ? I never filled taxes for my last year of sales and it went near over 30k. So I was wondering since all that was mostly withdraw, how could I get it going from now on in a better way ? Its PayPal canada.
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Old 10-06-2008
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Quote:
Originally Posted by gurusgrafx View Post
If you where going to have to pay money out of pocket to the IRS there are many ways to avoid it, you just need a good accountant.
I file my own taxes. I use Turbo Tax software. It's good to be self-employed.

BooMer
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