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Ebay And Irs Reporting


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#1 nyslzzle

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Posted 02 November 2010 - 08:32 PM

I read an article today on paypal saying that anyone using a third party for collecting payments will be required to report money received to the IRS starting January 2011. Paypal (as well as others) will report directly to the irs. This will probably mean that many of the sellers of compacts will no longer sell on ebay if they are required to use paypal for receiving payments. Since ebay stopped letting people ask for moneyorders over a year ago they only way to sell is to use a third party to collect payments.

What will this mean to those who want to purchase solids? Im guessing that the only way to get them will be when they are released at stores. Unless someone has a business or creates a business and files all the proper irs forms they will be discouraged from selling.

Either way it is going to become harder to find solids.

Interesting wouldn't you say?

#2 mostlyminis

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Posted 03 November 2010 - 11:22 PM

When I was doing a fair amount of selling on e-bay I had a seller number and kept track of everything I sold to pay state tax and I did pay the IRS for what I made selling. You can deduct all your expenses and since I was never a major seller, it wasn't very hard to keep track of. I used a green accounting notebook, but if you were clever with excel, I imagine you could set up a fairly easy way to keep track.

I can see where it would take a lot of time if you were a power seller, but for the casual seller, it isn't that hard to get your license and fill out a form or two.
:)

Hopefully, most of the solid sellers will feel that way and the selling/buying won't be slowed down by the new requirement. It may go along as usual until the law is changed to collect sales tax on internet sales and then it would get more complicated. I'm sure with all the downturn and states looking for money everywhere, that law will become more popular. With the states anyway, not the sellers!

#3 butterflies1219

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Posted 04 November 2010 - 05:49 AM

Ebay actually limited my sales to 10/month even though I have been selling over 60 items for the last few months! Grrrrr! When I asked if you can sell more if you have a store the appeals department and the regular customer service both indicated that the limit is now going to be placed on all sellers including stores but not powersellers only. The appeal guy mentioned that more limits are going to be rolling out.

I believe that ebay is trying to push out the casual sellers. That is just my personal opinion from the various funnelling rules they are setting in place over the last year or so. I think that ebay wants the powersellers not the little guys. It really irks me on this selling limit! I hate it. It has now cut into my tiny bit of additional income that I use to purchase my solids and help with extra bills that my disability checks just can't cover.

#4 nyslzzle

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Posted 04 November 2010 - 04:42 PM

Hi mostlyminis, The law was passed and there will be tax on all internet sales, this is why paypal will be reporting anything over $2000 income or 200 transactions (per year). From what I have read paypal will be asking all sellers for a tax ID # or SS# and send them a 1099 form at the end of 2011. Im sure that many sellers will comply but the thing is that now they will be adding sales tax to the ending prices. This means the buyers will be the ones stuck paying the taxes.

Sure does stink that the government will be getting taxes from the buyers (on purchases) and the sellers (profit. After all the fees from ebay and paypal and shipping costs I dont think there is too much profit left. The hassel of either doing and keeping all the paperwork or hiring an accountant might not be worth it for them to sell the items.

Just think about the people that sell small things costing $5 each. If they sell 200 items they will have to do all that work for a tiny profit. The big sellers will be fine Im sure.

Those warehouse empties will probably be double the price after this. Ewwwww.

#5 Ar

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Posted 04 November 2010 - 10:07 PM

I wonder if this is just the beginning and will spread to sites such as Craigslist.

Ar

#6 mostlyminis

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Posted 15 December 2010 - 01:57 AM

Hi nysizzle. I finally got back in here. Wow, I didn't know that law on tax on internet sales had been passed. I figured it was a matter of time, but I haven't been keeping up. That is going to be a nightmare to keep track of. Yick.

#7 Ar

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Posted 17 December 2010 - 06:54 AM

Does this law mean that websites such as Amazon which don't charge tax will now have to collect sales tax?

Ar

#8 nyslzzle

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Posted 17 December 2010 - 10:01 PM

Hi AR
Yes this means that all the websites will collect taxes. Thanks what I have read anyway.
And yes it will be an accounting nightmare.

#9 zooey

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Posted 16 January 2011 - 09:53 AM

Very interesting topic. I don't think this will hurt the casual seller, as long as you have your original receipts. By casual seller, I mean someone who actually collects solids because they love them. Not someone who just buys solids to re-sell.

If you, as a true collector, decide to sell a few of your older solids which you have grown tired of, chances are you will get LESS than you actually paid for it/them. If you have your receipt I would imagine the difference would be considered a tax write-off, since you've lost money on the original price.

This, of course, is just IMHO. :rolleyes:

#10 Sandra

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Posted 16 January 2011 - 06:25 PM

Hey ! Good to see you back, Zooey ! :D

It's been a while - hope you are well. B)

Yes, you are quite right about the tax write-offs.

I remember Woody also mentioned this a while ago when we were discussing something else about selling solids below what you paid for them . . . :angry:

And certainly, if you buy only to re-sell then I guess yes, this is a taxable business ! :unsure:

#11 VEGAS LADY

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Posted 17 January 2011 - 09:14 AM

WOW good to see you back Zooey, MISSED YOU... :( Hope all is well for you.

Margaret.....

#12 Petals

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Posted 18 January 2011 - 04:17 AM

Zooey, so goooood to see you! :)

#13 wjh414

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Posted 18 January 2011 - 12:02 PM

Hello and Happy (?) New Year!
I'm not a seller but what I don't understand is how ebay can dictate what form of payment the sellers can request. I remember being able to send a money order or even a personal check in the past. Now PayPal is the only means allowed and ebay owns PayPal. Isn't there some conflict of interest here?? I have friends who won't buy on ebay because they don't want a PayPal account. It just doesn't seem right to me and I agree the government is just looking for another way to take our money and waste it. And ebay is just as greedy as any big business. It's really a shame - it started out as a neat way for anyone to buy and sell.
Wendy

#14 Petals

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Posted 19 January 2011 - 05:17 AM

Hello, Yes, I agree with you entirely. I checked it out in the U.K. as this, as I thought and others too, was not legal as it has become a monopoly. I cannot remember exactly what was discussed when I brought this subject up but no doubt I will remember later when I am more awake!

The company is registered in Lichtenstein (I will double check) and this is why they are able to do this. I remember auctions of mine being removed because I dared to say that I did not wish to accept PayPal. I was told by ebay that you HAVE to accept them as a form of payment. To top it all, EBAY are always writing that we should keep our postal charges down. I have written to Ebay, to no avail, asking why PayPal take interest from our postal charges! THE WHOLE METHOD is disgusting so even if you give an absolute accurate postage charge without putting in the extra for the wrappings (which DO COST MONEY) they still take their cut.

I agree they are too greedy and it is now a Monopoly. We need someone else to come along and to be competitive. The unfairness reflects in the fact that they introduced all these changes once they were well known and popular, which should never have been allowed. They also allow items to be shown in their sellers' programme, which should not be there as they are not authentic!

#15 Sandra

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Posted 19 January 2011 - 05:50 PM

:angry: Ha, I'll get on this bandwagon too !

Speaking of postage - I don't sell very often, but the last two times I did, Ebay calculates the postage charge for me and I don't even know how the postage charge is calculated or even what the amount is!

I find out when my buyer pays via Paypal and then I have to send it regardless of what I have to pay for P&P !

I find this outrageous ! :angry:

So I haven't been selling on Ebay since.




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