ebay tax question...

Discussion in 'Bad Dog Cafe' started by cmm71, Jan 29, 2020.

  1. Chunkocaster

    Chunkocaster Poster Extraordinaire

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    Ebay and paypal changed our system about a year ago, I now have tax added by them on every international purchase. 10% is the rate they decided on. The system just changed again in the past week and now some items seem to include that 10% in the total while others still add it as a separate charge in checkout. It really annoys me to have to pay on used items. I bought a used discontinued t shirt I really wanted last night. $14 bucks us ended up costing me $52 bucks to my door.:mad:

    I also have a running total of every transaction on ebay and paypal. One of the downsides of online shopping and the internet in general.
     
  2. Switchy

    Switchy Tele-Holic

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    It's a lot less than $9000.

    From Intuit:

    Normally income you received totaling over $600 for non-employee compensation (and/or at least $10 in royalties or broker payments) is reported on Form 1099-MISC. If you are self-employed, you are required to report your self-employment income if the amount you receive from all sources equals $400 or more.
     
  3. Texicaster

    Texicaster Tele-Afflicted

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    That's 1099-Misc.... I was thinking 1099-K which is what I as a business deal with.. sorry. MY threshold is actually higher...Says $20,000 on Paypal...

    https://www.paypal.com/us/smarthelp...rs-will-i-receive-a-1099-tax-statement-faq729

    I recall getting them when I hit $9000 though...

    BUT that's just reported or the form. I still have to declare $1 as business income.

    The idea of getting a form or not does not relieve the tax liability; we're expected to do our own accounting.... The 1099 forms are simply Paypal telling you what they told the IRS. We should then look at our numbers AND the 1099 to make sure accurate and if not take up with Paypal. It's not an IRS problem per se.
     
  4. Harry Styron

    Harry Styron Tele-Afflicted Silver Supporter

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    Think of it as a transaction tax not a property tax. A sales tax is on economic activity, unlike a property tax, which is a tax on value.
     
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  5. mfguitar

    mfguitar Tele-Afflicted

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    It does make it difficult but as mentioned the 1099-K is different. Today is you buy and sell you almost have to set up a business, if not you will need to report the hobby income then you do not get the benefit of you cost of goods sold. It was bound to happen with the millions of dollars that flow through eBay and PayPal.
    https://www.irs.gov/businesses/understanding-your-form-1099-k
     
  6. cmm71

    cmm71 Tele-Meister Silver Supporter

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    The problem is in work...its being looked into on PayPal's end. The 1099K I received in the mail shows that I had transactions in excess of $100,000 in 2019! There's no earthly way that's accurate. I haven't done that much in 20 years. Something is foul. I've been prone to impulse buy knowing that I can always sell on ebay...I don't do that as much anymore. My interest in buying/selling gear is starting to taper off and this certainly has me concerned enough to commit to holding on to what I have. With the cost of shipping getting worse and now this tax stuff, it's a hassle.

    Thanks all.
     
  7. AndyPanda

    AndyPanda Tele-Holic

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    Since the IRS is treating you as a business by taxing your income on eBay sales ... you might as well call it a home business so you can show that sale as a $100 loss rather than a $900 income.
    And while you're keeping receipts/records .. go ahead and calculate a percentage of your utilities and rent or house payments (and don't forget paper clips, printers, computers, shipping and stamps etc.) for your "home office" that you run this business out of.

    If you call it "a guitar you bought to play and then you got tired of it and sold it" then the sale price is pure income --- if you call it "inventory" it's a business loss.
     
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