Around this time every year, we start getting anxious messages from eBay sellers knowing that they have to do their taxes soon. Usually this is their first year selling online and they suddenly realize that they made a good deal of money. More than just “garage sale” money. More like a serious “part-time job” money. Or even more. And if it’s over $20k, Paypal automatically notifies the IRS of your earnings.
So I reached out to Mark Tew, who is a certified CPA and tax accountant. He runs the blog, Bare Budget Guy, which is about budgeting and personal finance.
We pepper him with all the questions we had about doing taxes as an eBay seller.
- When do I have to file taxes?
- Do I have to form an LLC?
- Do I have to have a separate business bank account?
- How should I keep track of everything?
- What can I deduct?
- How do I keep track of inventory?
- What happens in an IRS audit?
- (and many more…)
Of course if you ask a hundred tax accountants the same question, you could get a hundred different answers. But Mark is a smart guy and shares his knowledge, letting us know he’d have to find out more if he wasn’t sure. And that some answers depend on a seller’s particular circumstance. Consideration is an important trait in our book.
Mark is also taking new tax clients over at Not Your Dad’s CPA. Our local accountant is retiring this year, so we’re considering him for 2016. He lives in Michigan, but it can all be online these days.
If you have any questions, ask below. He’ll stop by to share his opinion.