ARE WE GETTING TAXED ON OUR EBAY SALES???

[dj_spryte]

I just calculated my income tax on my T5 here in Canada, i'm not sure if it's the same in the US but I owe the governemnt 700 dollars. I have 2 other jobs aside from seeling on ebay but I've never had to pay this much. I was just wondering if every time we make a paypal deposit or a money order deposit into our accounts, does the governement know where it's coming from and is it considered as past of our income?

[Jim]

I just filed my T1 the past weekend. If the government could keep track of where all our money is coming from, there wouldn't be such a thing as tax fraud But seriously, I highly doubt Revenue Canada tracked your PayPal activity...they'd be running into all sorts of privacy trouble if they did. Might be a wise idea to take your taxes to an accountant so he or she can double check the numbers.

-Jim

[Griking]

Whether you decide to pay taxes on your online earning or not is ultimately up to you but you'd be foolish to think that the government is just ignoring all the money trading hands on eBay and PayPal.

This has already been discussed somewhat in THIS thread.

[Buyatari]

There is a tax for triple-posting on DP.
$500.00
You must now pay the fine.

[Sylentwulf]

Any profit over $500 is supposed to be reported. I paid roughly $3000 this year for my online sales. that's with 2 kids, a new vehicle for work, and a lot of other related expenses.

[kevin_psx]

I just calculated my income tax on my T5 here in Canada, i'm not sure if it's the same in the US but I owe the governemnt 700 dollars. I have 2 other jobs aside from seeling on ebay but I've never had to pay this much. I was just wondering if every time we make a paypal deposit or a money order deposit into our accounts, does the governement know where it's coming from and is it considered as past of our income?

Don't know Canada.

But in U.S. if you don't report the ebay (or stock or any other) income on your 1040 Form--- they don't know about it. So it does not get taxed.

There's a risk that Ebay might report the income w/o your knowledge. But right now I don't think that's happening.



I lost $50 on ebay last year.
The government can not tax a net loss.
So I'm safe.

[Diatribal Deity]

Because you had more than one job, your estimated tax contribution was less because you were being taxed at the lesser individual amounts. Once combined it elevates you to a higher tax level thus you owe more money.

Generally there is a fee attached if you underestimated you obligation, so that would be the giveaway (most of the time).

[Bronty-2]

I'm a tax accountant in canada.

DJ - I assume you mean your t1 not t5. And I'm confused as to your question because if you prepared your t1, you would know whether or not you included ebay sales. And if you had someone else do it, you would know whether you gave them that information. Or are you saying that your notice of assessment is at a higher balance than the return you prepared?

But whatever the answer, the reason, most of the time, if you are simply a salaried employee with not much in the way of other deductions is that your employer didn't deduct enough tax at the source. They haven't yet, to my knowledge, gone after ebay sales and besides which I think you'll find canada will be less hot to trot to go after collectibles sales on ebay anyway. There's a concept called listed personal property in Canada which includes such things as books, stamps, rare coins etc. and deems both the proceeds and cost of each to be $1000 effectively making any LPP under $1000 in value nontaxable. Whether or not your particular collectibles meet the definition of LPP and how stringent they would be in sticking to the listed examples I'm not sure. But I do think there is less for canada to gain in going after collectibles sales.... but that's purely my speculative opinion only and should be taken as such.

The other poster has a point when he says that if you have two lower bracket jobs each withholding tax at lower rates and yet combined you are in a higher bracket, it might cause a problem, but generally the opposite is actually true because each of your employers would be withholding EI and CPP at source which would result in an overpayment of EI and CPP (and a resulting refund) assuming you are over the approx 40k in income at which you max out your EI and CPP.

[Vroomfunkel]

I'm a tax accountant in canada.

DJ - I assume you mean your t1 not t5. And I'm confused as to your question because if you prepared your t1, you would know whether or not you included ebay sales. And if you had someone else do it, you would know whether you gave them that information. Or are you saying that your notice of assessment is at a higher balance than the return you prepared?

But whatever the answer, the reason, most of the time, if you are simply a salaried employee with not much in the way of other deductions is that your employer didn't deduct enough tax at the source. They haven't yet, to my knowledge, gone after ebay sales and besides which I think you'll find canada will be less hot to trot to go after collectibles sales on ebay anyway. There's a concept called listed personal property in Canada which includes such things as books, stamps, rare coins etc. and deems both the proceeds and cost of each to be $1000 effectively making any LPP under $1000 in value nontaxable. Whether or not your particular collectibles meet the definition of LPP and how stringent they would be in sticking to the listed examples I'm not sure. But I do think there is less for canada to gain in going after collectibles sales.... but that's purely my speculative opinion only and should be taken as such.

The other poster has a point when he says that if you have two lower bracket jobs each withholding tax at lower rates and yet combined you are in a higher bracket, it might cause a problem, but generally the opposite is actually true because each of your employers would be withholding EI and CPP at source which would result in an overpayment of EI and CPP (and a resulting refund) assuming you are over the approx 40k in income at which you max out your EI and CPP.

This is why, despite having a good degree in Mathematics, I have no desire to go into accountancy of any sort - and especially tax! What a kerfuddle! I guess the money is probably good, and I'm sure I could understand it all if I really put my mind to it, but really ... surely it doesn't need to all be so convoluted??

Vroomfunkel

[Bronty-2]

This is actually about as straight-forward, non-convoluted a question as you can get Yup, it's all shades of grey but the nice thing about that is that you can always find a way to argue your desired... ermm... correct position

[kevin_psx]

I just calculated my income tax on my T5 here in Canada, i'm not sure if it's the same in the US but I owe the governemnt 700 dollars.

How much did you REALLY pay last year (total withheld tax))?

I paid $13,000 in income tax. Grrr.

[tornadostormxl]

The price of freedom.

[rbudrick]

The price of freedom.

Yes, true. But I do hear others argue this, considering the situation in the US right now.

-Rob