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Voting Question: Paying taxes on paypal transactions?

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  • Voting Question: Paying taxes on paypal transactions?


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Answer #1 | 19/12 2013 10:39
Whether this is reported to the IRS or not is irrelevant. You should get a Form 1099-K from PayPal, but even if you don't, you still report all income on your return. You are taxes on your business profits. There's no way to say what those might be from the information provided. You subtract the reasonable and necessary business expenses from your gross income to determine the taxable profits. Cost of goods sold, shipping charges, and vendor commissions are all legitimate business expenses. You must have receipts or other proof of payment in order to deduct the business expenses. You file Form 1040 and attach Schedule C to calculate the net profit on the business. If the net profit is more than $400, you attach Schedule SE to calculate the self-employment tax. The self-employment tax is 15.3% of 92.35% of the net profit. Income taxes will depend upon your dependent status, marital status, filing status, personal exemption(s), etc. Without the exact numbers (or a very close estimate) there's no way to say where you sit on taxes.
Positive: 20 %
Answer #2 | 19/12 2013 12:32
So, how did you acquire the items you sold? If you sold $22K of stuff, it's a stretch to believe you were selling all of your old stuff just to get rid of it and downsize. (I've been doing this for a month and I've only sold $600 of stuff, with about $150 being capital gain because specific items sold for more than I paid for them--and you can bet that's ALL going to be on my schedule D as required by law.) If you bought items specifically to resell, you have inventory. Inventory needs records and if anything is left unsold at the end of the year, you can't deduct it. If you bought items to sell with the expectations of supporting yourself from the proceeds, you have a business and it goes on a 1040 schedule C, whether or not the money was reported on the 1099-K. Surely you have a few cases where the buyer picked the item up in person and paid cash. You have to include the cash too. The records for the eBay fees and Paypal fees are pretty easy. You did print out your invoices, right? Just total those up. The records for expenses like buying boxes and tape need receipts too. You do NOT deduct sales tax as that was something you were collecting on behalf of the state. Since you appear to only live and work in Illinois, you were responsible for collecting the sales tax for items you shipped or delivered in state. Your quarterly reports to the state will help with filing the IRS forms.
Positive: 14 %
Answer #3 | 19/12 2013 17:57
And don't forget the 5% of the $22,000 for the state of Illinois.
Positive: 10 %
Answer #4 | 20/12 2013 10:49
This was NEVER untaxed income. Your failure to report it in the past was tax evasion.
Positive: 10 %
Answer #5 | 22/12 2013 07:15
Required by the local taxing authority in your local area for you to contact your local taxing authority and let them register you for this purpose and get copy of that form so that you can make copies when you are going to buy items to for you to resell out to the public and show you how to and explain to you that you do have to be a registered sales and use tax collector for them and what forms and schedule that you will have to use to correctly send to them the amount of sales and use taxes that you did collect for them during each period of time as you are required to do OK. Federal taxes social security, medicare taxes plus your federal income tax amount that you will owe and need to make the quarterly estimated taxes during each tax year for this purpose and time in your life. Self employed independent contractor sole proprietor using your name and your SSN as your TIN number for this purpose of your own business operation at his time. Self employed independent contractor using your daily written receipt book records to report your gross income or loss on the schedule C or CEZ along with the SE to determine your NET PROFIT or LOSS from your business income during the tax year for this purpose. SE your social security medicare tax amounts that you would OWE on your NET profit amount that would end up the page 1 line 12 from the schedule C and any SE tax owed page 2 line 56 and page 1 line 27 Deductible part of self employment tax attach schedule SE line 27 $$$ amount. Starting, Operating, or Closing a Business Starting a Business Starting a business could be exciting. If you're considering starting a business, start here. This section provides information on everything from a checklist for a new business, to selecting a business structure, and more. www.irs.gov/Businesses/Small-Businesses-&-Self-Employ ed/Starting-a-Business www.irs.gov/Businesses/Small-Busines ses-&-Self-Employed/Starting,-Operating,-or-Closing-a-Busine ss Hope that you find the above enclosed information useful. 12/22/2013
Positive: 10 %

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