[Masthead] Overcast ~ 57°F  
High: 63°F ~ Low: 36°F
Sunday, Jan. 22, 2017

Are you tracking your eBay and other internet sales expenses, NOW?

Posted Friday, March 25, 2011, at 9:09 AM

The new IRS requires all credit card or similar agencies (PayPal, Google Checkout and Amazon, etc) to report any person or entity that receives 200 exchanges and $20,000 in value for tax year 2011 (NOW).

I have seen the 200/$20,000 figures reported as either/or but now that both amounts must be met, so read this to get more answers or be sure to talk to a tax consultant. http://edocket.access.gpo.gov/2010/pdf/2...

If you think you may be even close to those figures, it would be wise to keep track of expenses incurred in your selling endeavors. It is wise to do that anyway, but eBay may seem more like a hobby right now, so you are not thinking as a business.

I know, I know, it is not a law that I am fond of either, but it seems to be one of the inevitable things in life and I am not going to live in fear of 'the Man' making my life miserable.

One of the 'gotcha's' in this law seems to be that they will have to report ALL fees paid to you as a vendor. That will include shipping which at times can be more that 50% of the amount, so pay attention!

They say that cash transfers, loans cash advances will not be part of this, but mistakes happen, or directives are misinterpreted, so.......

Showing comments in chronological order
[Show most recent comments first]

Possible tip for preventing an overage...have your spouse open and link their paypal account to any multiple sites you have, such as ioffer, etsy, u-sale, ebid, bonanzle, overstock, etc. And/or have your spouse open an ebay account and split your products between them...example, you expect to sell and collect $22,000 revenue this year, which would put you in the "report" bracket, but if you split the account it then becomes $10,000+ between two separate individuals.

This is just a thought and not a recommendation or advisement. Always talk to your tax consultant for your best advice. If it is in fact an either/or situation where both qualifications do not need to be met then this tip will only benefit someone who sells large-ticket items in small amount. If you sell motor parts, cars, furniture/antiques, high-end electronics, etc. you can reach $20,000 in fewer than 200 transactions

-- Posted by shawna.jones on Sat, Mar 26, 2011, at 4:38 PM

I sold one travel trailer for some folks and went over $13,000 in one hit, so your suggestions are well taken Shawna.

Someone may not plan on something like that and forget about keeping good records, then the opportunity comes up and whammo! they are left scrambling for write-offs, so plan ahead.

-- Posted by stevemills on Sun, Mar 27, 2011, at 3:34 PM

Respond to this blog

Posting a comment requires free registration:

Steve Mills and his wife have one daughter. They previously owned two coffee/ice cream shops, currently operate an internet sales company and teach classes, but his primary job involves the paper industry worldwide. Hobbies and interests lie in gardening, photography, recorded music and of course, their pets.