President, VIP Recycling
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My wife and I was talking, and she brought up a good point, so I wanted to see what the rest of you who sell actively on ebay.com do.
When it comes to Ebay earnings and taxes, do you calculate that into your taxes when you file each year, as part of your income/business income, or not?
I mainly do it, to get more out of the stuff I find, then just scrapping it, and use it for extra spending money.
Doesn't really go to the business per say.
Just wanted to see what you guys do with it.
George Beale - Founder & President - info@viprecyclingjunkremoval.com
VIP Recycling Junk Removal LLC - Premier Scrap Metal, Junk, & Electronic Recyclers!
http://www.viprecyclingjunkremoval.com
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I believe this year is the year eBay starts sending out 1099's. Can't swear to that, though.
Burly Smash![/COLOR][/SIZE][/FONT]
John Terrell (248) 224-2188
Burly Guys Junk Removal LLC
5499 Perry Drive Unit P Waterford, MI 48329
http://www.burlyguys.com
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ebay sent out 1099's at the end of 2011 also. Dont worry about it unless you sell over 200 items and receive more than $10,000 thru paypal payments. If you meet those criteria you will get the 1099. I file it as a business, that way i can claim cost of goods and overhead against it.
I buy and sell all types of scrap and escrap. I buy specialty and hard to sell escrap. I buy resale items. PM me or contact me at jghilino@hotmail.com
I AM ACTIVELY BUYING ESCRAP OF ALL TYPES. BOARDS, RAM, CPUS AND MUCH MORE
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I believe Uncle Sam's belief is you are supposed to pay taxes on all income
even if not documented with a 1099 or W2
And I find the income is a basis to offset expenses
Internet, the 2nd & 3rd phone lines, % use of the home as the office
which allows the same % deduction of home expenses >> Electric, heat, taxes, snow plowing, grass cutting and so and so and so
Last year the IRS was not set up for the PayPal 1099 so you just entered the amount in other income
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First off its not ebay that will send you the 1099. Its paypal. Second off its $20000 and 200 transactions that trigger paypal sending you the 1099. Here is the link with all the info. https://cms.paypal.com/us/cgi-bin/ma...ng_us/IRS6050W
Hi PTS, technically, it IS eBay since they are now the parent company of PayPal after buying it in '02. That's when they started the push for you to use PayPal to receive payment for your auction items. It wasn't long before you couldn't uncheck the PayPal box in your listing. No wonder with the nice fee that comes to them (if I remember correctly 4.5% back then).Originally Posted by PartTimeScrapper
George.....I do report my PayPal transers into my bank account. I've got eBay fees set up to be paid out of PayPal balance so that expense is already taken out before tax time.
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Your right got me on a technicality. Ebay does own paypal.
President, VIP Recycling
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Not sure if you mean you report that to or not. If not, you should, as that is a tax write off for your business.
Any expense, (gas, tools, equipment, paying customers, etc) is all taxable write offs. Going to lunch, even to MCd's is a tax write off.
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I am reporting about a 5% profit after everything is taken out. Rent is not cheap.
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Interesting they have such a high threshold. I believe anything over 600 bucks triggers a 1099 in the course of normal business.
President, VIP Recycling
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thanks everyone for your input. I decided I will add it to my business taxes.
Metal Recycling Entrepreneur
Collins, thanks for the "speculation."
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George...How many businesses have you bought and sold and you still don't know what income is whether it be gross or net?
Recyclable Material Merchant Wholesaler
Certified Zip-Tie Mechanic
"Give them enough so they can do something with it, but not too much that they won't do nothing."
President, VIP Recycling
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that is not what I was getting at. I was simply asking if anyone else treated it as taxable income and claimed it on their taxes or if they decided not to.
some people just sell on the side and use it as spending money, where others are hard core and really make it part of their business.
I personally claim everything and document every expense.
only stuff I don't claim is gifts, inheritances, etc.
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You don't see big business doing that, they hide every dime they can,
P & M Recycling - Specializing in E-Waste Recycling.
If you enjoy your freedom, thank a vet.
President, VIP Recycling
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True, but unlike them, I don't feel like heading to prison for tax fraud either.
Metal Recycling Entrepreneur
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Then I would pay the taxes on ALL the income you generate in order to put your mind at ease.
If you say you claim "everything"....like you did above....then this is part of "everything"
Metal Recycling Entrepreneur
If that is the case, then what is the point of your post and the thread??? You seem to often ask questions that you have either already decided a course of action for, or want to automatically go against the responses you receive.
And which is it do you claim it or not, your like a walking talking contradiction.
Last edited by Hiccup; 02-02-2013 at 07:43 AM.
I'd speculate he does it so other people can debate and decide a course of action for themselves. This forum isn't just about helping yourself, it's about helping others if you can...
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As this relates to my "normal" profession, let me post a few things to keep in mind.
The IRS rules say - "Generally, all US citizens are liable for federal income tax on their world wide income, without regard to whether the income arose from sources within or outside the United States."
The rules further go on to define what is income - "Gross income for federal income tax purposes mean ALL income from whatever source, except for the items specifically excluded by the Code (Code Sec 61). For the excluded items, consult your tax person. All income from scrapping would be reportable, whether or not you receive a 1099. Check or cash doesn't make any difference either. It is all reportable.
On the other hand, the IRS rules also state that - "a taxpayer, may deduct from gross income the ordinary and necessary expenses of carrying on a trade or business that are paid or incurred during the year."
I tell clients that, if they need to spend the money to help you make the money then it is deductible. If you have extra help available on a weekend and you run out of gas for the cutting torch, it would be reasonable to drive 120 mile round trip to get full bottles. However, it would not be ordinary and necessary to drive from Texas to California to get gas for the torch. The thing to keep in mind is be reasonable and prudent.
How can you get caught? I have seen cases where a person purchased a new Harley with the proceeds of scrap appliances. The now ex-girlfriend called the IRS, the audit started and the guy had no defense and could not prove how he had a loss on his business and was able to pay cash for the cycle. He had to pay tax, underpayment penalty, negligence penalty, several other penalties and interest. He wasn't happy, but now brings in every cash ticket - income and expenses - to make sure he never has to suffer thru that again.
The bottom line? Report everything - income and expenses and you will never have to worry about sleeping at night or having anyone question your integrity. Don't report everything and risk the possibility of someone suspecting you and turning you into the IRS to collect a reward (and yes they have a form for that!) Also remember that not reporting all of your income is fraud. There is no statute of limitation on fraud with the IRS. They can go back as many years as they want to.
The solution? Get your business to the point that it makes a great profit for you. That will leave you with enough to pay yourself AND your taxes.
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