Paypal and tax question

MULLINS5

I sell a lot on Etsy and have definitely hit the 200 transaction/20k in sales threshold so that will be reported to the IRS.

On Etsy Paypal is handled separately and is not reported.

If I do not meet the threshold on Paypal, do I still need to count that income as well?

mtcards

In theory, according to the US tax code, if you sell $1, it should be reported on your tax return. Whether or not a third party reports it on a 1099 is not relevant


As for the reporting of it, if you itemize, you can deduct any expenses associated with selling, including printer, internet costs, computer costs, cost of goods purchased, your electric if its sold from home, etc etc. In general, you should be able to deduct most of what was sold.


Dont know if thats exactly what you were asking, so sorry if it wasnt

Meatloaf

Be careful here. Like everyone will tell you, pay your taxes! Yes, you still need to count that income.

Also, I will emphasize if you sell 199 items on ebay for $20000.01 and then sold some stuff "direct" via paypal invoice or another marketplace, paypal will lump the non-ebay revenue in with the ebay earnings on your 1088. So if you think you are hiding anything, you are dead wrong.

Also, do not report loses year after year to the IRS. You will earn an audit. I have sold on ebay and via direct paypal itemized invoices for years. Yes, it sucks to itemize your expenses, but it pays off in the long run; good business men and women keep accurate books and factor in expected tax rates for their item prices. Note: The IRS ALWAYS WINS; don't believe the BS lawyer infomericals about people helping you beat the IRS for a small fee. If you think you are going to circumvent the system long run, you will lose at some point. Selling 200+ items on ebay year after year is not viewed as "hobby." In the end, the juice is not worth the squeeze. Show your profit, pay your taxes on this profit, and move on. If you are unable to make a profit in this up market because of taxes to be paid, then your business model probably needs to be reviewed and/or you should look at exiting the market.

CollectorAtWork

I don't think it's etsy or ebay that reports your sales to the IRS, but paypal. So if you are above 200 transactions/20K on your paypal account regardless of the income sources, then Paypal will report that to the IRS via the 1099.

brendanb438

Are you asking if you are expected to report income as income to the IRS?

brendanb438

Double tap...