posted on September 4, 2000 08:55:21 AM new
Muriel the new seller is! I have yet another question for the experts (and you ARE the experts!). When you sell on eBay, HYPOTHETICALLY - what does one do about taxes? Like, at the end of the year, I guess we have to claim this as income, eh? If you have a garage sale, do you claim it as income? If you sell at a Flea Market, do you claim it as income? I'm not asking what each of you does (unless you want to say), but just hypothetically speaking, what do you think someone would do? (Don't want to get anyone in trouble!)
Also, I've decided to come out. My name isn't Muriel. My name is Penny. But Penny was taken when I signed up at AW. (I explained in "Round Table" what Muriel means to me.) Whew! I feel like a weight has been lifted from my shoulders.
posted on September 4, 2000 09:13:12 AM new
Hello, Penny!
The tax implication is this: You pay taxes on your net gain at the end of the year. Garage sale proceeds are generally not taxable because one tends to buy merchandise for personal use, then resell it some time later, at a loss, at a garage sale. Therefore, there is no net gain. When you make the move to buying and reselling at a profit, you are liable for taxes on the amount of profit minus your expenses during the year. Keep track of mileage spent in traveling to yard sales and auctions; that is deductible as an eexpense. You have mentioned working in a bank; keep an expense sheet on your online auction sales as you would for an employer. The difference at the end of the year - positive, we hope! - is your net gain and is taxable.
Remember, too, that in order to continue to deduct expenses as business-related, that you must show a profit, however small, in at least two years out of five.
This is the information I've received from my accountant; I'm sure other posters will be able to add tips and helpful tricks along the way.
I have yet another question for the experts (and you ARE the experts!). When you sell on eBay, HYPOTHETICALLY - what does one do about taxes? Like, at the end of the year, I guess we have to claim this as income, eh? If you have a garage sale, do you claim it as income? If you sell at a Flea Market, do you claim it as income? I'm not asking what each of you does (unless you want to say), but just hypothetically speaking, what do you think someone would do? (Don't want to get anyone in trouble!)
