Ebay Will Soon Be A Tax Concern!

This weekend I started to read blogs about what my tax accountant would soon be an inevidible -> The IRS is coming after income made on ebay (see proposed form below).

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Starting with 2011, Paypal and other third party merchants will be required to report to the IRS details on any seller that pulls in more than $20,000 in sales/year and has more than 200 transactions in the same year. If you don’t meet one of theses pre-requisutes then nothing is required. In baseball card terms, this means if you sold your Mantle rookie card for $30k and that was the only sale on ebay you had all year…lucky you, no reporting to the IRS! The big guys who rip and flip all year will obviously have to report their paypal transactions thanks to this rule.
Articles here:
Article on Auction Bytes
Taxgirl

This will most definitely seem daunting to may hobby enthusiasts as they are now possibly faced with the fact of “Do I really have to report to the IRS my baseball card sales”?
The rules around a hobby and income are in the tax code and they most likely will require a tax accountant to decipher and translate the specifics. However each hobby enthusiast must look at their own habits and ask themselves if they will fall into the category of reportable transactions to the IRS. If so, now might be a good time to actually start keeping track of your spending amounts as well as sales on ebay. While it might be annoying and time consuming it will definitely save you alot of time if the IRS does come looking for your numbers in 2011. There is no worse person to bump heads with than with uncle Sam the tax man!
Some folks are thinking about only taking checks and money orders from now on and not dealing with paypal any longer because of this. Another dilemma is giving paypal your tax ID# which will now be a requirement as per this rule. Not doing so will make your sales subject to a withholding tax…as if their fees weren’t enough!
What are your thoughts on this topic? What do you plan to do if you feel you will be forced to report your income to the IRS? Give me your thoughts in the comment section and enjoy your last year outside of the IRS radar!
Play Ball America!
Cesar

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One Response to “Ebay Will Soon Be A Tax Concern!”

  1. Lifelike Baby Dolls Says:

    […] Ebay Will Soon Be A Tax Concern! « Extra Innings – When 9 Isn’t Enough! […]

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