Ebay and Taxes

**GeorgeB** · 01-31-2013, 08:25 PM

Originally Posted by KZBell

George...How many businesses have you bought and sold and you still don't know what income is whether it be gross or net?

that is not what I was getting at. I was simply asking if anyone else treated it as taxable income and claimed it on their taxes or if they decided not to.

some people just sell on the side and use it as spending money, where others are hard core and really make it part of their business.

I personally claim everything and document every expense.

only stuff I don't claim is gifts, inheritances, etc.

**Mechanic688** · 01-31-2013, 11:59 PM

Originally Posted by GeorgeB

that is not what I was getting at. I was simply asking if anyone else treated it as taxable income and claimed it on their taxes or if they decided not to.

some people just sell on the side and use it as spending money, where others are hard core and really make it part of their business.

I personally claim everything and document every expense.

only stuff I don't claim is gifts, inheritances, etc.

You don't see big business doing that, they hide every dime they can,

**GeorgeB** · 02-01-2013, 05:22 AM

Originally Posted by Mechanic688

You don't see big business doing that, they hide every dime they can,

True, but unlike them, I don't feel like heading to prison for tax fraud either.

**Victor** · 02-01-2013, 05:55 AM

Originally Posted by GeorgeB

True, but unlike them, I don't feel like heading to prison for tax fraud either.

Then I would pay the taxes on ALL the income you generate in order to put your mind at ease.

If you say you claim "everything"....like you did above....then this is part of "everything"

**Hiccup** · 02-02-2013, 07:39 AM

Originally Posted by GeorgeB

I personally claim everything and document every expense.
.

If that is the case, then what is the point of your post and the thread??? You seem to often ask questions that you have either already decided a course of action for, or want to automatically go against the responses you receive.

Originally Posted by GeorgeB

My wife and I was talking, and she brought up a good point, so I wanted to see what the rest of you who sell actively on ebay.com do.

When it comes to Ebay earnings and taxes, do you calculate that into your taxes when you file each year, as part of your income/business income, or not?

I mainly do it, to get more out of the stuff I find, then just scrapping it, and use it for extra spending money.

Doesn't really go to the business per say.

Just wanted to see what you guys do with it.

And which is it do you claim it or not, your like a walking talking contradiction.

**CollinsHaulin** · 02-02-2013, 08:23 AM

Originally Posted by Hiccup

If that is the case, then what is the point of your post and the thread??? You seem to often ask questions that you have either already decided a course of action for, or want to automatically go against the responses you receive.

I'd speculate he does it so other people can debate and decide a course of action for themselves. This forum isn't just about helping yourself, it's about helping others if you can...

**numbers** · 02-02-2013, 09:05 AM

As this relates to my "normal" profession, let me post a few things to keep in mind.

The IRS rules say - "Generally, all US citizens are liable for federal income tax on their world wide income, without regard to whether the income arose from sources within or outside the United States."

The rules further go on to define what is income - "Gross income for federal income tax purposes mean ALL income from whatever source, except for the items specifically excluded by the Code (Code Sec 61). For the excluded items, consult your tax person. All income from scrapping would be reportable, whether or not you receive a 1099. Check or cash doesn't make any difference either. It is all reportable.

On the other hand, the IRS rules also state that - "a taxpayer, may deduct from gross income the ordinary and necessary expenses of carrying on a trade or business that are paid or incurred during the year."

I tell clients that, if they need to spend the money to help you make the money then it is deductible. If you have extra help available on a weekend and you run out of gas for the cutting torch, it would be reasonable to drive 120 mile round trip to get full bottles. However, it would not be ordinary and necessary to drive from Texas to California to get gas for the torch. The thing to keep in mind is be reasonable and prudent.

How can you get caught? I have seen cases where a person purchased a new Harley with the proceeds of scrap appliances. The now ex-girlfriend called the IRS, the audit started and the guy had no defense and could not prove how he had a loss on his business and was able to pay cash for the cycle. He had to pay tax, underpayment penalty, negligence penalty, several other penalties and interest. He wasn't happy, but now brings in every cash ticket - income and expenses - to make sure he never has to suffer thru that again.

The bottom line? Report everything - income and expenses and you will never have to worry about sleeping at night or having anyone question your integrity. Don't report everything and risk the possibility of someone suspecting you and turning you into the IRS to collect a reward (and yes they have a form for that!) Also remember that not reporting all of your income is fraud. There is no statute of limitation on fraud with the IRS. They can go back as many years as they want to.

The solution? Get your business to the point that it makes a great profit for you. That will leave you with enough to pay yourself AND your taxes.

**GeorgeB** · 02-02-2013, 11:47 AM

Originally Posted by Hiccup

If that is the case, then what is the point of your post and the thread??? You seem to often ask questions that you have either already decided a course of action for, or want to automatically go against the responses you receive.

And which is it do you claim it or not, your like a walking talking contradiction.

I asked to simply get everyones opinion on what they do. if you read one of my last posts in this thread, you will see where I said that.

you see people on here all the time asking peoples opinions.

also in regards to your last statement, you obviously don't really read well. I have already clearly said that I claim EVERYTHING except for gifts and inheritances.

if you believe me to be a walking, talking, contradiction, no one says you have to read my threads.