Forum Thread

Paypal Reporting Income to IRS with 1099-K. eBay Sales Over $20,000 AND Sold Over 200 Items

blackblaze 20,457 3,352 February 2, 2012 at 07:18 AM
Deal
Score
+4
232,757 Views

Thread Details

Last Edited by blackblaze February 3, 2012 at 04:29 AM
I was reading this article this morning and posted it in another thread regarding 1099-K

http://www.forbes.com/sites/kelly...taxpayers/

I know there are a lot of folks here who buy and sell (using Paypal to receive payments) based on slickdeals they come across. Some folks for profit, some folks, to get their item for free (buy 4, sell 3, get their slickdeal item free). I've been able to get some great deals going the route of buying a few extra and getting the item for free. However, with so many great slickdeals throughout the year and selling, for some, you may have cross the threshold of now receiving a 1099-K from Paypal ($20K gross received and 200 transactions) that is also reported to the IRS

http://www.irs.gov/instructions/i1099k/ar02.html

So, how does one handle this. Some questions that come to mind:

1. What distinguishes hobby seller from small business?
2. Reported amount is gross, not net, where is clarity to show just net income?
3. If you receive this form, and somehow show a result of net income, can you claim expenses, itemized deduction (mileage to acquire items, etc, etc.)?
4. Since this is new, how well are tax accountants prepared to help tax preparers to navigate this new form?
5. Should you create a new Paypal/Ebay account to account for selling personal items/friends items, etc vs items strictly for resale?

Wanted to open it up for discussion. Cool2

Community Wiki

This post can be edited by most users to provide up-to-date information about developments of this thread based on user responses, and user findings. Feel free to add, change or remove information shown here as it becomes available. This includes new coupons, rebates, ideas, thread summary, and similar items.

Once a Thread Wiki is added to a thread, "Create Wiki" button will disappear. If you would like to learn more about Thread Wiki feature, click here.

266 Comments

9 10 11 12 13

Sign up for a Slickdeals account to remove this ad.

Joined Dec 2007
L10: Grand Master
20,457 Posts
3,352 Reputation
Original Poster
#151
Quote from canonikon View Post :
Do I need the Premier or the Home Business version?

If I received a 1099-k for selling too much on ebay, do I need the Premier or the Home Business version?
You want the home business version.
http://turbotax.intuit.com/personal-taxes/
Reply Helpful Comment? 0 0
#152
Quote from blackblaze View Post :
You want the home business version.
http://turbotax.intuit.com/personal-taxes/
Even if I have a day-time job and ebay is just my part-time? That's still considered a business?

This person say deluxe works too...

https://ttlc.intuit.com/questions...rmation-at
Reply Helpful Comment? 0 0
Joined Dec 2007
L10: Grand Master
20,457 Posts
3,352 Reputation
Original Poster
#153
Quote from canonikon View Post :
Even if I have a day-time job and ebay is just my part-time? That's still considered a business?

This person say deluxe works too...

https://ttlc.intuit.com/questions...rmation-at
Even as part time, its still considered a business. Business may have more questions to unlock deductions and other items related to running a business on the side vs deluxe, used when you have a regular job working for someone else. I just think you'll miss certain items using deluxe but someone else, maybe a CPA, can chime in.
Reply Helpful Comment? 0 0
#154
I sell on Ebay and another site. The other site provides me with my total gross sales for 2012. Where can I get this data on Ebay. They say you can get it from Paypal but all of my Paypal transactions are just one big long list that include sales from both the other site and Ebay. I need a total for just Ebay
Reply Helpful Comment? 0 0
#155
I've skimmed through this thread, and what I've read, it looks like I am supposed to report my ebay sales on my taxes using a schedule c. Does this sound right?

Also, I've read a few things about charging sales tax on purchases shipped to your own state. Does anyone know what the rules are on this, or do this / how to do this? It seems kind of stupid to go through all of the work since it won't amount to much money at all.
Reply Helpful Comment? 0 0
Joined Dec 2007
L10: Grand Master
20,457 Posts
3,352 Reputation
Original Poster
#156
Quote from xur17 View Post :
I've skimmed through this thread, and what I've read, it looks like I am supposed to report my ebay sales on my taxes using a schedule c. Does this sound right?

Also, I've read a few things about charging sales tax on purchases shipped to your own state. Does anyone know what the rules are on this, or do this / how to do this? It seems kind of stupid to go through all of the work since it won't amount to much money at all.
You report you net profit, after deductions, etc on your 1040, if you are doing a regular filing.

Yes, you are "suppose" to collect tax if you ship items within your state. Im now completely sure on how that works if you already paid tax on the item that is shipped within the state vs if someone had a tax exempt card and did not pay tax on the item and suppose to charge tax on the sale of the item.

In general, it may be in your best interest to hire a CPA so not to cause any red flags. IRS gave a pass to folks with1099-K for 2011 taxes, but for 2012, doubtful that they will allow it again with all of last year to get things right.
Reply Helpful Comment? 0 0
Joined Dec 2007
L10: Grand Master
20,457 Posts
3,352 Reputation
Original Poster
#157
Quote from thecleator View Post :
I sell on Ebay and another site. The other site provides me with my total gross sales for 2012. Where can I get this data on Ebay. They say you can get it from Paypal but all of my Paypal transactions are just one big long list that include sales from both the other site and Ebay. I need a total for just Ebay
there is an ebay app called sales report plus that you can add to your ebay account which will give you such details. I think it only works though from the time you add it to your account, and does not go back to previous months, but I may be wrong.
Reply Helpful Comment? 0 0

Sign up for a Slickdeals account to remove this ad.

#158
Quote from blackblaze View Post :
You report you net profit, after deductions, etc on your 1040, if you are doing a regular filing.

Yes, you are "suppose" to collect tax if you ship items within your state. Im now completely sure on how that works if you already paid tax on the item that is shipped within the state vs if someone had a tax exempt card and did not pay tax on the item and suppose to charge tax on the sale of the item.

In general, it may be in your best interest to hire a CPA so not to cause any red flags. IRS gave a pass to folks with1099-K for 2011 taxes, but for 2012, doubtful that they will allow it again with all of last year to get things right.
I actually didn't receive a 1099-k, since I didn't sell enough, but I figure I'll report the taxes since I am technically supposed to. It seems like overkill to hire a CPA and go through all of that trouble when I didn't make all that much.

And can I just fill this stuff out on my 1040 (line 21?)? I thought it went on a schedule c.
Reply Helpful Comment? 0 0
Last edited by xur17 February 4, 2013 at 10:59 AM
Joined Dec 2007
L10: Grand Master
20,457 Posts
3,352 Reputation
Original Poster
#159
Quote from xur17 View Post :
I actually didn't receive a 1099-k, since I didn't sell enough, but I figure I'll report the taxes since I am technically supposed to. It seems like overkill to hire a CPA and go through all of that trouble when I didn't make all that much.

And can I just fill this stuff out on my 1040 (line 21?)? I thought it went on a schedule c.
If you didn't do a lot of sales and didn't get a 1099-K, then Paypal didn't report your gross income, so you could choose not to report any profit from it at all. Your sales could be deemed hobby selling, if it doesn't support you and its a secondary source of income. If anything, a CPA who has worked with ebay traders are vey good at answering these type of questions.
Reply Helpful Comment? 0 0
#160
Quote from blackblaze View Post :
If you didn't do a lot of sales and didn't get a 1099-K, then Paypal didn't report your gross income, so you could choose not to report any profit from it at all. Your sales could be deemed hobby selling, if it doesn't support you and its a secondary source of income. If anything, a CPA who has worked with ebay traders are vey good at answering these type of questions.
I would definitely classify it as hobby income. I only do it for fun, and don't rely on the income at all. How much would a CPA cost?
Reply Helpful Comment? 0 0
Joined Dec 2007
L10: Grand Master
20,457 Posts
3,352 Reputation
Original Poster
#161
Quote from xur17 View Post :
I would definitely classify it as hobby income. I only do it for fun, and don't rely on the income at all. How much would a CPA cost?
CPA probably ranges from $100 - $170 per hour. The more organized you are, the less time they will need to get your affairs in order, if you decide to go that route.
Reply Helpful Comment? 0 0
#162
I have a question want to verify. My employer isnt computer savvy and he wants me to list a bunch of USB cables for him so the simple questions you need to sell over $20,000 and 200 items to get a 1099 form? Say I sell over 200 items yet overall I made $10,000 no 1099?
Reply Helpful Comment? 0 0
Last edited by gpister February 7, 2013 at 05:42 PM
just being slick
#163
Quote from gpister View Post :
I have a question want to verify. My employer isnt computer savvy and he wants me to list a bunch of USB cables for him so the simple questions you need to sell over $20,000 and 200 items to get a 1099 form? Say I sell over 200 items yet overall I made $10,000 no 1099?
have him make a ebay account and you use it to sell his stuff.
Reply Helpful Comment? 0 0
#164
A little late to the conversation but I wanted to add my experience. I made just under 200 transactions on eBay and about $14,000 in sales. Thought I was in the clear. I have a separate Paypal account I use for payment on consulting work I do for other businesses. Between the 2 accounts I went over 200 and 20K. I received two separate 1099's. So in short, it's not only sales that count towards your total, it's any payment, gift, Mass Pay, or any other type of transaction handled via Paypal and having separate accounts with the same social does not help.
Reply Helpful Comment? 0 0
$4,200 Chasing Bank Promotions YTD
#165
Quote from chaozz View Post :
have him make a ebay account and you use it to sell his stuff.
Since I have Ebay and knows I "use to" sell (I told him ur not gona get much with the fees and the competition but seems pretty hard headed) he wants me to do it which I don't feel comfortable with the whole 1099. I was also thinking of telling him to give me his Paypal so the funds would go to his account.
Reply Helpful Comment? 0 0
Page 11 of 18
9 10 11 12 13
Join the Conversation
Add a Comment
 
Copyright 1999 - 2016. Slickdeals, LLC. All Rights Reserved. Copyright / Infringement Policy  •  Privacy Policy  •  Terms of Service  •  Acceptable Use Policy (Rules)  •  Interest-Based Ads
Link Copied to Clipboard