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10 year part-time seller and never have received a 1099 form. Lost job now full time seller and my sales have exceeded $20,000 and 200 items. What I read on Ebay is that managed payments and paypal are separate and each will send their own 1099, only if you reach $20,000 and 200 items on that platform.
Thanks!
Darth
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Whether you get a form or not, your sales are taxable. If you have been not paying taxes in the past, that just means that the IRS didn’t catch you 🙂
You should get your records separately from eBay and PayPal, and then make sure to deduct all your expenses.
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There is no free ride. Â If you make $7.00 from babysitting, you technically are supposed to pay taxes on the income.
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The guys I know at the flea market who sell out of the back of their car live the simplest life. All cash business. Never make enough to get flagged by the IRS. Make enough for rent, smokes, a burger and gas. See you next Saturday.
Though we definitely deduct everything we can, we’ve always claimed our eBay and other income. Sure, we pay taxes but we also get to show we’re a profitable business which means we can get bank loans. Bank loans let us buy property. Property helps us build wealth.
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If you make $400 or less of self-employment income, you don’t have to pay taxes on it.
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Since you’ve never declared Ebay as income, I’m assuming you haven’t calculated your legitimate deductions and tax liability.
A $20,000 1099 is far from a profit statement.
You’ll need to deduct shipping costs, Ebay and Paypal fees, Cost of Goods Sold, Shipping and Office supplies, vehicle mileage and lots of others. By the time this is done, you’ll probably be closer to $10,000.
The first time you do this, it’s a lot of work but least you’ll know.
Depending on your other income, you may not owe much if anything.
Good Luck
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Thanks for the advice. Was planning on paying taxes this year. I haven’t in past selling mainly my old collectibles and comics.
Should I get a tax id for resell? I did buy several items at a retailer the other day to resell.
Bed, Bath and Beyond going out of business sale was 70% off first item and .01 for second item.
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If you mostly source at flea markets and yard sales, a state sales tax certificate may not be that useful since you’re not being charged tax anyway. Many retailers aren’t set up to sell wholesale so they charge tax on every sale and won’t take your certificate. The certificate can be most useful when buying at auction because auctioneers will take it and depending on what you sell there may be wholesalers you’d be interested in who will only sell to resellers with a certificate. There are record-keeping requirements for the certificate set by your state department of revenue.
But if you’re going to report business income on your state and federal tax returns, depending on your locale you may need a business license issued by the city or county you’re in and to get zoning clearance to operate out of your house, etc., even if you don’t get a tax certificate from your state department of revenue. Business start-up requirements are very specific to your state and locality and vary widely across the country. Does the “CT” in your name refer to Connecticut? If so, start here: https://www.advancect.org/faq/connecticut-business-registration-requirements-br/
Congratulations on your first year of big numbers!
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@ Sonia – I disagree – Â from the Turbo tax website:
If it’s less than $400.00- Â can you get away with it? Â Of course. Â The IRS isn’t trolling bank accounts for loose change. Â But are you supposed to pay taxes on any profits? – yep.
<h1 class=”PageTitle lia-component-common-widget-page-title custom-pageTitle”><span id=”linkSubject1″ class=”lia-link-navigation lia-link-disabled”>Do I have to include self employed income if it was less than $400 and I did not receive a 1099 form?</span></h1>Yes, all income must be reported on your tax return. The $400 threshold means that you will not be subject to SE taxes on the income.
It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income.
All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040.
Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income.
Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer.
Fees received for babysitting, housecleaning and lawn cutting are all examples of taxable income, even if each client paid less than $600 for the year. Someone who repairs computers in his or her spare time needs to report all monies earned as self-employment income even if no one person paid more than $600 for repairs
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