Paypal eBay Tax Return!!!

[Doug Rose]

Anyone receive a tax income receipt form Paypal??  If you sold over 20K INCLUDING SHIPPING you have to pay taxes on it. F*cking amazing. Can you believe this sh#t.  This is just too much. Try too keep your head above water and they hold you under. I surrender...

[wds]

That is pretty fowl.  If someone were to buy $20k from Ebay, do they get a statement so they can deduct the expense form their tax return?

[Phonesrfun]

The old rule of thumb with garage sales and the like is that your basis (cost) of the items you sell is probably more than what you got when you sold it.  If you sell something for more than you paid for it, the taxes are calculated on the amount over your cost (your profit).  Perhaps you have some records to support the costs of what you sold, or at least reasonable estimates.  You are probably going to have to pay a visit to a tax person.

Another gotcha is that you will likely have to pay self employment tax on the profit too.

I would bet that this was not PayPal's choice to send you a 1099, but rather, they were probably compelled to do so by the IRS.

[Doug Rose]

Congress just passed this at end of year when they extended the Government for three months from going bankrupt. No one told us. Now I owe over 7K in taxes for busting my hump trying to put my daughter though graduate school. Sound fair to me.

Occupy eBay....I so f*cking mad!!

[LarryInMichigan]

I am sure that ebay will start charging a fee for sending the tax forms

Larry

[Willytx]

This income is likely treated as self employment and subject to Medicare and SS taxes, along with the Federal income tax. Any expenses you have in listing or shipping above what you receive can be deducted.

The most important thing is to keep detailed records.

http://www.irs.gov/businesses/small/selfemployed/index.html

[AE_Collector]

We sort of knew it would happen one day, too much "non taxable income" going on with ebaY. However, looks as though the US government as just as above board as the Canadian Government is in that wouldn't one think a years notice before the start of the tax year where you will be expected to begin keeping records in order to pay the taxes at the end of the year would be fair?

Terry

[Phonesrfun]

The important thing to remember is that the cost of what you are selling along with many other costs such as supplies and shipping costs are deductible from the income.  Unless you are selling stuff that was just absolutely given to you, the taxes will not be due on the gross amount of the 1099.

[Willytx]

On another tax related note, many tax refunds that were due yesterday have been delayed one week while the IRS does some "fine tuning".

[Willytx]

This ain't gonna be pretty people. Expect the $20,000 figure to get lower over coming years.

The PayPal 1099 FAQ
http://outright.com/blog/the-paypal-1099-faq/

Why did the the new 1099K come about?
http://tinyurl.com/7havj9f

This guide tells some but could have been more specific:
First Year eCommerce Seller's Tax Guide
http://outright.com/documents/CommerceTaxGuide.pdf

[Doug Rose]

We sort of knew it would happen one day, too much "non taxable income" going on with ebaY. However, looks as though the US government as just as above board as the Canadian Government is in that wouldn't one think a years notice before the start of the tax year where you will be expected to begin keeping records in order to pay the taxes at the end of the year would be fair?

Terry

Agreed ...we knew it would happen some day, but really odd that they decided in the last week of December for the CURRENT year and not for next year. Tough to plan backwards 51 weeks.

No it is not eBay/paypals fault but they sure created the monoploy. You MUST accept Paypal, you pay an eBay fee, a paypal fee....postage and now it is ALL taxable income.. You send a phone to China and it costs $100 to get it there, you are taxed on that $100 as income! I moving in with Terry. OH CANADA!!!...Doug

[LarryInMichigan]

I moving in with Terry. OH CANADA!!!

Then you will have the pleasure of paying G.S.T. on just about everything

Larry

[Doug Rose]

The important thing to remember is that the cost of what you are selling along with many other costs such as supplies and shipping costs are deductible from the income.  Unless you are selling stuff that was just absolutely given to you, the taxes will not be due on the gross amount of the 1099.

tough to go back 57 weeks and figure it all out. It would have been a tad easier for next year, not a quick fix to the budget this year.

[AE_Collector]

I moving in with Terry. OH CANADA!!!...Doug

Okay, walk north and take a left at the border crossing....(bring phones)

10C (50F) here today, looks like winter might be over.

Terry

[twocvbloke]

Where money flows, governments will try their damnedest to tax it, cos it's the nature of governments to make the rich richer, and the poor poorer....

And I want to move to Canada too...