Recording Ebay earnings when doing taxes?

[bangtango]

No, this isn't the age old question of whether or not an Ebay seller has to report their income when doing their taxes. Unlike most people starting these threads, I am aware that all income is reported.

I am just wondering what is the easiest way to do it. This would be my first year recording it as a regular seller. I have all the amounts worked out, more or less. I guess I just need some pointers from people who regularly list Ebay income when filing their taxes.

I'm using TurboTax and see where I can record it as either business earnings or income earned from a hobby (which I consider it, since I sell at my own leisure and don't do it to support myself).

[dcescott]

My accountant has a little picture above his monitor:
See no evil, Hear no evil, Speak no evil.

Ebay to me is too infrequent. I don't make enough to consider it income in comparison to a freelance work. That would be taxed, and I am ready for that.

An easy way is to print out reports of your auctions quarterly. That way you can substract your ebay fees and paypal fees. You can view your account status right? Also my accountant said to subtract your postage and mileage to the post office. Try also your supplies and your purchased goods you sell. That would be hard coming from a garage sale but a good system of recording would help if you get audited, which is unlikely unless you are seriously making a killing on ebay.
You can truly nickel and dime it all the way.

[bangtango]

My accountant has a little picture above his monitor:
See no evil, Hear no evil, Speak no evil.

Ebay to me is too infrequent. I don't make enough to consider it income in comparison to a freelance work. That would be taxed, and I am ready for that.

An easy way is to print out reports of your auctions quarterly. That way you can substract your ebay fees and paypal fees. You can view your account status right? Also my accountant said to subtract your postage and mileage to the post office. Try also your supplies and your purchased goods you sell. That would be hard coming from a garage sale but a good system of recording would help if you get audited, which is unlikely unless you are seriously making a killing on ebay.
You can truly nickel and dime it all the way.

I ended up with roughly 2 grand coming in, before taking into account the listing fees, final value fees, postal costs, supplies and driving costs. So obviously that total drops quite a bit.

Anything over $1,000 is more than I want to hide, particularly when I am having my return direct deposited into the same bank account that some of my Paypal ends up going into.

I'm just wondering if I should be considering it business income or miscellaneous/hobby income. I sure as hell wouldn't consider it a business. The only reason most of my sales happened this year is because I was liquidating a huge music collection and managed to purge some of my video game stuff with it. So it wouldn't be half of that amount in 2007.

I may be worrying over nothing but I was audited this past year because someone at my "regular" (desk) job apparently screwed up some of my payroll records and also had the wrong address listed in my company file. It took months to get that cleared up. To make a long story short, what they sent in to the IRS didn't match what I sent in.

I just don't feel like getting an "official" letter every other day asking for more statements or pay stubs, like I did this past fall.

[Kitsune Sniper]

The way I see it?

Uncle Sam ain't getting a CENT of what I earn through eBay. And it never will.

I pay my taxes when I work at a place that registers my earnings and reports them. But otherwise? Nope.

I'm evil, I know. :P

[swlovinist]

I agree, unless you are doing it for a primary income, dont report it. No harm, no foul. After all, nobody reports yard sales!

[Sniderman]

I pay:
income tax
state tax
local city tax
sales tax
gas tax
cigarette tax
property tax


So I'll be damned if I'm gonna voluntarily report anything else that can (and will) be taxed.

[Mayhem]

Well indeed. On a related note, do I declare the extra money I get from writing for Retro Gamer? Of course not, the cheque goes straight in the bank. It wouldn't be worth doing it if Golden Brown took 40% of it from me.

[dcescott]

IRS looks at your job as a primary source first. The numbers need to add up there. That's all, I wouldn't worry as long as the folks at your work don't screw you again.

[suckerpunch5]

The way I see it?

Uncle Sam ain't getting a CENT of what I earn through eBay. And it never will.

I pay my taxes when I work at a place that registers my earnings and reports them. But otherwise? Nope.

I'm evil, I know. :P

Way to stay under the radar!

er, except for that last post . . .

[jonjandran]

Isn't Ebay just a giant Yard-Sale ?

Do you have to report yard-sale income ?

NOPE. :)

[bangtango]

Isn't Ebay just a giant Yard-Sale ?

Do you have to report yard-sale income ?

NOPE. :)

Well, the thing is I do have my returns deposited straight into my checking account. My checking account is the same place where nearly all of the money from my Ebay sales passed through, via Paypal.

If you don't mind me asking, what sort of money are some of the people who are responding making on Ebay? It's not like I ended up with only $200-400 worth of sales so I am just curious.

[jonjandran]

If you don't mind me asking, what sort of money are some of the people who are responding making on Ebay? It's not like I ended up with only $200-400 worth of sales so I am just curious.

I usually make about $6000-$8000 profit a year. But it is all stuff that I buy and use and then resell for a profit when I'm tired of it. And the way I look at it. I paid taxes on the money I used to buy the stuff, and I paid sales tax on the items, and I'll be double danged if I pay taxes on it again.

[Bojay1997]

The difference between Ebay and a yard sale is that typically you don't make a profit on yard sale items. You are required to report income, whether that be income from free-lance writing for a magazine or income from selling personal collectibles. Your double tax analogy doesn't work. You only pay taxes on the net income (i.e., you can deduct what you paid for the item and costs associated with selling it). Don't mess with the IRS. It's just not worth it. They can and will ruin your life.

[XianXi]

The difference between Ebay and a yard sale is that typically you don't make a profit on yard sale items.

What about selling at a swapmeet? What if you are selling high demand items that you pull a heavy profit from?

[dcescott]

My typical week.
Saturday, pull 60-80
go hunting.
Find goods,
Go home clean,test , take pics.
List around 7:30pm for 3 days
Make around 150-200
My net is about twice the amount pulled if I am lucky after fees and shipping.
I'm not out to make a killing each week.
Mind you I keep some back for the collection and enjoyment and for future auctions. It's cyclical because I try to keep from drawing out of my checking account, paypal is seperate from my bank.
Bottom line
I enjoy the hunt, and the auctions fuel the hunt. But I don't go hunting every weekend either. Sometimes I can't. There's not enough activity for me to list, plus I itemize everything to death with my freelance income, I'm married with a kid, two with next years filing. This aint religion it's just a hobby.