Friday, February 29, 2008

Do eBay Sellers Have to Pay Taxes on Income from Sales?

I have received this question from several sellers this week, so here is an article to help you better understand the issue of reporting income from eBay sales. Disclaimer: I am not an accountant or tax expert. This is just some general information to help you understand how the IRS sees proceeds from online auctions.

The rule of thumb: If you are selling your own personal items, that have been in your possession for a period of time and were originally purchased for your own use, the answer is no. This would be the same situation as if you had a garage sale to sell your own personal items.

If you have purchased items specifically to resell them on eBay, then yes, you do have to report the income from those sales. Many sellers think that selling on eBay is just a fun hobby, and the money generated is not reportable as income. The IRS disagrees.

It is better to be safe than sorry in this situation (especially when dealing with the IRS). In other words, if you are calling yourself an eBay seller, and regularly sell items on eBay for profit, you are responsible for reporting that income.

This page on outlines the online auction situation. Please consult with your accountant for more information regarding your specific situation.

Reporting the income from your eBay sales isn't all bad. You are also entitled to report your expenses as a small business owner and deduct your expenses from internet fees to shipping materials.

Work at Home with Doba

Sunday, February 24, 2008

eBay Not Working for You? List of eBay Alternatives

This is a public service announcement for those eBay sellers who are repeatedly expressing their discontent on the eBay forums and discussion groups. (Chronic whiners.) If you're not happy on eBay, please, by all means, explore other options! Users report higher fees, less control over shipping rates, and there is no auction platform. You can take advantage of Amazon's advertising and traffic. - Marketplace for handmade and craft items. Very economical to list. 20 cent fee for each item, listing has 4 month duration. Commission is 3.5% of the sale price (charged post-transactionally). Handmade, homemade items can be anything from jewerly, personalized items, even computers. - Free to list. Final value fees 5% of sale price less than $25. - You pay nothing until your item sells. - 5 styles of different auction formats. Free to list your item. No commission or final fee. One monthly membership fee to participate. - "charges insertion, upgrade (if applicable), reserve price, and closing fees. If an auction closes with a winning bid, the reserve price fee is refunded. Fees are based on a percentage of the selling price.'s fees are 33-50% cheaper than our major competitor's." - Every member gets a free store. You can pay extra for ads place in premium locations.

iOffer - Free to list your items. Final value fee can be anywhere between 50 cents and $5, depending on the final sale price.

Feel free to post this link on your eBay groups and forums. The whining about eBay is getting rather annoying. If people aren't happy, by all means, let's encourage them to find alternatives!

Happy selling-

Suzanne Wells