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anyone heard of ebay/paypal pulling this bullshit?

D

d94

Senior member
my dad just told me an interesting story, apparently my aunt started a little hobby
she's a house wife, but handles about 12 kids so she's certianly busy.
but the hobby is going to local auctions/closeouts, getting goods cheap and reselling on egay.

apparently she's been profiting 3-4k every month
and she just got a notice from the government that they've been monitoring her and she needs to claim this all as income so she can pay taxes on it.

is it BS or is this a common thing?
 
making profit is not a hobby

income from ebay is income and must be reported and you have to pay tax on it, just like any other job
 
so your saying whenever i sell something on ebay i should report it as income even though i already payed tax on it when i bought it?
 
Originally posted by: d94
so your saying whenever i sell something on ebay i should report it as income even though i already payed tax on it when i bought it?
Click to expand...

Sales tax and income tax are two different things.
 
Originally posted by: d94
so your saying whenever i sell something on ebay i should report it as income even though i already payed tax on it when i bought it?
Click to expand...
You must report the profit that you made on it as income.
 
Originally posted by: d94
so your saying whenever i sell something on ebay i should report it as income even though i already payed tax on it when i bought it?
Click to expand...
If you sell items at a profit you owe taxes on the difference between what you paid for it and the sale price (less ebay fees).

Just like storekeepers out in The Real World.

PS - you paid sales tax. This is income tax from a business. Schedule C FTW!
 
Well technically, all income, even those from sales on ebay, needs to be reported as income, and taxed accordingly. But if you're only making $1-2k a year, it's not going to go notice, so you're fine. But if you're making $30k+ a year, you better believe it that the IRS are going to catch on (or will eventually).
 
Originally posted by: d94
so your saying whenever i sell something on ebay i should report it as income even though i already payed tax on it when i bought it?
Click to expand...

That is selling used goods. Nothing wrong with that.

What your aunt is doing is buying and selling for profit. That is income, so she needs to pay taxes on it. You want to play the game, you follow the rules.
 
She can claim alot of deductions on it. Since she is basically self-employed. Paying taxes is duty of a citizen.
 
Originally posted by: d94
so your saying whenever i sell something on ebay i should report it as income even though i already payed tax on it when i bought it?
Click to expand...

The IRS has rules defining what is for income vs. what is a hobby. In this case its clearly income.

If you sell a random thing or two you should be fine. Its not your job, its not your income. It's a gain on property - which the IRS does tax but has crazy rules for that.
 
Originally posted by: iversonyin
She can claim alot of deductions on it. Since she is basically self-employed. Paying taxes is duty of a citizen.
Click to expand...

She'd also get nailed on the self employment tax tho.
 
She needs to register with her state's department of revenue-she needs to pay B&O, state, and county tax too.

I pay close to $1000 per month to my state. I can write off any profit to the feds though.

Rogo
 
i'm more surprised that someone seems shocked at the idea of paying taxes on an extra 30-48k a year. And then calling it BS.


I really hope you have graduated highschool, or held a job yet. Also if you've never had a job, well then don't be surprised when you get paid minimum wage and get taxed on it.
 
Originally posted by: Dragoon42
i'm more surprised that someone seems shocked at the idea of paying taxes on an extra 30-48k a year. And then calling it BS.


I really hope you have graduated highschool, or held a job yet. Also if you've never had a job, well then don't be surprised when you get paid minimum wage and get taxed on it.
Click to expand...
Pretty much what I was thinking.
edit: And what happend to the language filter?
 
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