How to File Taxes for Selling on eBay

It is against the law not to report all income to the IRS. Whether selling on eBay is your primary source of income, or simply a hobby, all income should be reported. Selling on eBay can be viewed as a hobby as long as one is not in it to make money. As such, any hobby expenses associated can be used to offset the income. However, unlike a business, any hobby losses cannot be used to offset hobby income. If one sells on eBay to make money, then the income must be reported as business income. In addition, any associated losses (lost or damaged packages, refunds) can be used to offset the income.

Only eBay sellers who exceed the IRS thresholds will receive an IRS Form 1099-K from Paypal. Sellers exceed the IRS thresholds when they received $20,000 in gross payment volume for the sale of goods or services AND have over 200 separate payments for goods or services in the same calendar year. 1099-K Tax Form is found via Paypal. Visit How Online Sellers Find Tax Form 1099-K from Paypal for detailed instructions on downloading Paypal's 1099-K Tax Form.

Advice for sellers reporting eBay income as a business:

- Keep detailed records including all receipts for purchases and expense. Organized sellers can use a bankers box or store receipts digitally with a receipt scanner.
- Research home office use expense. Write It Off! A-Z Guide to Tax Deductions for Home Based Businesses is full of helpful tax deductions.
- Research deductions for transportation: gas / parking / depreciation on vehicle
- Seek professional assistance related to tax accounting and IRS reporting
- Many deductions are available on Tax Schedule C Profit or Loss from Business.

Visit Taxes Made Easy with Paypal Annual Financial Summary Report for details.

For detailed information regarding the Internal Revenue Code Section 6050W as it relates to payment processors, including Paypal, visit:

https://www.paypal.com/webapps/mpp/irs6050w

How online sellers find tax form 1099-K from Paypal

Only eBay sellers who exceed the IRS thresholds will receive an IRS Form 1099-K from Paypal. Sellers exceed the IRS thresholds when they received $20,000 in gross payment volume for the sale of goods or services AND have over 200 separate payments for goods or services in the same calendar year. To download and print your Paypal 1099-K, do the following:

1. Log in to Paypal
2. Click on the Activity link at the top of the Summary page
3. On the Activity page, click the drop down arrow next to the Statements link near the right hand side of the screen.
4. After clicking on the arrow, a drop down list appears. Click “Tax Documents”
5. If you have met the IRS thresholds mentioned above, a downloadable 1099-K form will appear for the tax year. If you have not met the thresholds, a simple message appears: “You have no 20xx tax documents.”

If a seller has not met the IRS thresholds, the total sales amount for the year can still be determined. United States Business & Premier Account holders have access to an Annual Financial Summary Report. Visit Taxes Made Easy with Paypal Annual Financial Summary Report for more information. Any seller can download all account activity and total the amounts for "Payments Received". Visit How Online Sellers Find Total Shipping Costs Via Paypal for Tax Filing as an example.

Sellers should have an organized bookkeeping system to store receipts. A simple and inexpensive solution is a bankers box. More sophisticated sellers may choose to store receipts digitally using a receipt scanner. Online sellers who have experience completing a tax return can file online for free using the IRS free file program. Visit How to File Federal Taxes Online for Free. Less experienced tax filers may use TurboTax which offers a guided, step-by-step questionnaire tailored to your personal income tax situation. For further information on tax laws relating to online selling, The Complete Tax Guide for E-commerce Retailers including Amazon and eBay Sellers is a great read!

How to File Federal Taxes Online for Free

Tax time is upon us. Entrepreneurs including eBay and Amazon sellers can file the Federal Tax Return online using IRS freefile. The software is available via the Internal Revenue Service IRS website: www.irs.gov
 

One must know how to prepare taxes as the software is not as user friendly as others (TaxAct, TurboTax). The tax forms are fillable and can be sent electronically, but the software lacks the interview type questionnaire available in other tax preparation software. It does, however, perform math calculations and provides basic guidance with help screens per form.

To begin, direct the browser to http://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free

Each user will need to create a new account for every year as the information is not carried over from year to year. To complete the process more easily, I recommend the user have the following documentation available:

1. Copy of last year’s tax return. Last year’s Adjusted Gross Income (AGI) is required to e-file this year.

2. Total expenses to be used on Schedule C Profit or Loss from Business. Find out how to determine total shipping costs and transaction fees via Paypal.

3. Total sales for last year. Sellers meeting the IRS thresholds will receive a 1099-K from Paypal. See how to find the 1099-K from Paypal.

4. Amount of refunds / returns for the year. Returns and allowances as well as other expenses are available on the Annual Financial Summary Report. See how to download your copy at Taxes-made-easy-with-paypal-annual-financial-summary-report

As always, research the new tax laws and consult a professional if needed.

Hot Toys & Stocking Stuffers on Sale at Piece of Scrap

Swing into Christmas sale at piece-of-scrap. Shop our store for huge discounts on the TOP Christmas toys and stocking stuffers! High quality brand name clothing on sale at discount prices including Ralph Lauren, Tommy Bahama, Chico's, Harley-Davidson and more. Don't forget to buy your UGLY HOLIDAY CHRISTMAS SWEATER for those office parties and contests! As always, if you don't like my price, make a BEST OFFER!

Piece of Scrap on eBay

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How to research an accepted Best Offer price on eBay

One of the biggest questions for experienced and newbie eBay sellers alike is, “How much should I sell this for?” While there are numerous ways to research selling prices for items listed on eBay, I will discuss a very specific one: after searching completed items on eBay, the price accepted was via Best Offer. What is the best offer accepted price?

To learn how to search completed listings for similar items on eBay, visit How to research what price to sell an item for on eBay If an item has sold with a Best Offer, the asking price is crossed out. To see the accepted Best Offer price, do the following:

1. Click to view the complete item auction detail page
2. Click the link near the top of the item description page “see original listing”
3. On the original listing page, scroll down to where the auction item number is stated
4. Just above the item number, is a link to Print the page
5. Click the Print link.

The print item page will display the accepted Best Offer price. Continue to research other sold items by returning to the Advanced Search Results and repeating the steps above to identify the selling price of a Best Offer acceptance.

How to research what price to sell an item for on eBay

One of the biggest questions for experienced and newbie eBay sellers alike is, “How much should I sell this item for?”. While there are numerous ways to research selling prices for items listed on eBay, I will discuss just one: search completed items on eBay for similar items or exactly the same item. 

To see how I search for completed comps (comparative solds) on eBay, watch this video on an eBay BOLO that sold for over $100! 

eBay also offers a FREE Terapeak Research tool. I use this tool when pricing rare BOLO items, including this one that sold for nearly $200! Watch how to use Terapeak Research Tool

To search completed listings for similar or exactly the same item on eBay:
1. Click the Advanced Find link in the upper right hand corner of most any eBay page.
2. On the Advanced Find page, enter the keyword search term (very generically).
3. Check the appropriate box for Condition (New or Used).
4. Then, scroll further down the page and select the box for Sold Items.
Optional: On the left side, click the box to search US only listings
5. Click the button to Search Now.
6. On the search results pages, the completed and sold listings appear. In the Sort drop down box, select the option to sort by “Highest price plus shipping”

Optional: The date of sale may be important if an item was once hard to find or just released. Newly released items will initially fetch a higher price until the item is readily available nationwide (rules of supply vs. demand)

Using the steps above, click here for an example of completed eBay listings for "cashmere sweater"

A seller can see what similar items are selling for by looking at these completed search results listings. If desired, click one of the completed listings to see the item auction description to verify the item is exactly you think it is.

If an item sells quickly at the Buy It Now price, some sellers may think that they let the item go at too low of a price. In fact, some sellers may think they could have received more for the item and greed sets in. Second guessing the price of an item that has already sold is easy to do, but not healthy. As long as a seller had made money on the item (after all fees, of course), then selling the item was a success and the overall store inventory turnover ratio has been improved.

If an item sells via Best Offer acceptance, the price is crossed out. To see the actual price accepted, visit How to Research an Accepted Best Offer Price on eBay

How to save money on a Homecoming dance dress

Child milestones such as 8th grade graduation may be costly when finding the appropriate apparel, especially for girls. As the children grow, high school events including Homecoming and Prom dances are even more costly. To save money on a party / homecoming dress, try shopping at thrift stores! I find many under valued items at thrift shops, garage sales and Goodwill to flip for a profit online. Formal dresses are much cheaper at the thrift store than in a retail store! Thrift with me:

Many of the top designer dresses are available at discounted and affordable prices including:

David’s Bridal
My Michelle
BCBG
Babyonline

A variety of online retailers take part in rakuten.com, the pioneer and leader of online Cash Back shopping. There is not a fee to join rakuten.com, one simply signs up and then clicks through the site to the retailer of your choice. After a purchase is made from the online retailer, Rakuten will send a cash back “Big Fat Check” four times a year. A few retailers available via rakuten.com include:

Macy’s
Neiman Marcus
Kohls
Lord & Taylor
Talbots
Sax Fifth Avenue
Dillards

In addition to online cash back shopping using rakuten.com, online promotional codes are often available at retailmenot.com. These promotional codes are often good for free shipping or a percentage off of an entire purchase. Some promotions require a minimum purchase amount to receive a discount. If that is the case, buy more to save more and then sell the excess on eBay: How to get started selling on eBay and making money

One should keep these discount saving sites in mind when shopping for a party dress: 8th Grade Graduation, Prom, Homecoming, Bridesmaid, etc. In addition, start your Christmas shopping by clicking through rakuten.com to earn cash back your next purchase at ToysRUs, LeapFrog, GAP, Carters, Amazon and many more!