Not every eBay sale is subject to income tax, but most are. ... Assuming that you originally bought the used items for more money than you are selling them for, you don't have to report the income received from the eBay sale.
If you've sold at least $20,000 in gross merchandise value and exceeded 200 transactions for goods and services* on eBay this year, you will be receiving a tax Form 1099-K for all your 2019 sales transactions including relevant internet sales tax.
If you make any profit from your eBay sales, that is reportable income. If you are selling used clothing and household good for less than you originally paid for them, then there is no profit. The IRS calls this an "online garage sale" and since you don't make a profit there is nothing to report.
Regarding you question, how much can you sell before paying tax on your earnings, as a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly. You must file a return if you earn $400 or more in net earnings from your business.
Any income you receive through PayPal, whether or not it's reported on form 1099, must be included on your tax return. ... Even if you don't operate a formal business, you will still be required to report the income on Line 21, “Other Income” on IRS Form 1040, Schedule 1.
If you make more than $20,000 in gross sales and have 200 or more transactions on eBay, you should receive a 1099-K form reporting this income to the IRS.
Does eBay charge sales tax on purchases? Yes, eBay charges sales tax on many purchases on behalf of the seller, without the seller setting up anything at all. This is to comply with marketplace facilitator laws, and happens automatically during the checkout process.
Starting January 1, 2020, Hawaii, Illinois, Wisconsin, and Michigan will be joining the list of states where eBay will be collecting sales tax on applicable transactions.
Sold goods aren't taxable as income if you are selling a used personal item for less than the original value. If you flip it or sell it for more than the original cost, you have to pay taxes on the surplus as capital gains.
The bottom line is that Amazon is a far more competitive market for individual sellers and leans towards newer items whereas eBay provides sellers with the ability to build brand identity and while a majority of its items are new, it provides a niche for used items and collectibles.
Generally, for 2020 taxes a single individual under age 65 only has to file if their adjusted gross income exceeds $12,400. However, if you are self-employed you are required to file a tax return if your net income from your business is $400 or more.
Paying self-employment tax
If your total net income from Etsy sales is $400 or more, you must also pay self-employment tax on the income.
The basic rule for collecting sales tax from online sales is: If your business has a physical presence, or “nexus”, in a state, you must collect applicable sales taxes from online customers in that state. If you do not have a physical presence, you generally do not have to collect sales tax for online sales.
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