Now e-Bay wants my SSN and bank account info . . .???

[drj52]

if you sell from montana to someone in nyc, as well as other states, or overseas, which sales tax do you collect and how do you report that tax to the irs? if i sent a pmo, which is as good as cash... are you reporting it to the irs? some dealers are required to collect sales tax from certain states n not from others... thats going to change soon. interstate sales taxes! your ssn is your tax number with the irs for reporting income for taxes.

money laundering for sure n the irs is trying to figure out new laws to put a stop to that.

oh lets complicate this with bit coin as a tax problem which is also being taken care of by the irs with new laws for virtual currency.

uncle sam wants you to document every cent... cashless society makes it harder to hide money.... trust no one! in god we trust, all others pay pals?

Oh, now I see the confusion. eBay needs the SSN to report income tax, not sales tax, to the IRS and to the states. The IRS doesn't get involved with sales tax. The IRS requires eBay's Managed Payments operation (and PayPal also) to report the gross sales for anyone who's sold $20,000 or more this year and has done 200 or more transactions. eBay is also required to send the seller a 1099k. Individual states have lower thresholds, some as low as $600, and eBay has to follow those directives also for state income tax purposes. Next year, the Federal threshold drops to $600 for everyone. Note that sellers have always been required to report all of their sales, even if they didn't meet the $20k documentation threshold; it's being lowered to $600 because lots of sellers didn't report their income.

eBay does collect and distribute sales tax for all states that have passed a "marketplace facilitator" law (about 40 so far), but they're doing that for every seller, whether or not they're in the new Managed Payments system that Drew was told he has to sign up for. eBay doesn't need anyone's SSN to handle sales tax.

As for which sales tax is collected, that's very straightforward. Sales tax is based on where the item is being shipped. If someone in NY buys something on eBay and has it shipped to their home address, they'll pay NY sales tax, and eBay will remit that tax payment to NY. If they have it shipped to a relative in PA, they'll pay PA sales tax, and eBay will remit that tax payment to PA. If the package is being shipped internationally, there often is no tax collected, but eBay has recently started collecting and remitting VAT (Value Added Tax) for countries in the EU.

[Pete Roody]

drj52 wrote:

Oh, now I see the confusion. eBay needs the SSN to report income tax, not sales tax, to the IRS and to the states. The IRS doesn't get involved with sales tax. The IRS requires eBay's Managed Payments operation (and PayPal also) to report the gross sales for anyone who's sold $20,000 or more this year and has done 200 or more transactions. eBay is also required to send the seller a 1099k. Individual states have lower thresholds, some as low as $600, and eBay has to follow those directives also for state income tax purposes. Next year, the Federal threshold drops to $600 for everyone. Note that sellers have always been required to report all of their sales, even if they didn't meet the $20k documentation threshold; it's being lowered to $600 because lots of sellers didn't report their income.

This gets very complicated for non-business sellers. If you sell a camera for $5k will this entire amount be considered income by the IRS? What if you paid $6k for the camera originally? Obviously you will have to document the sale and original purchase on your Income Tax filing to show no taxable profit was made. And if you have to do this for every sale when you exceed the $600 sales threshold figure you essentially will have to end participation on ebay unless you have a business established for selling.

[BrianShaw]

This gets very complicated for non-business sellers. If you sell a camera for $5k will this entire amount be considered income by the IRS? What if you paid $6k for the camera originally? Obviously you will have to document the sale and original purchase on your Income Tax filing to show no taxable profit was made. And if you have to do this for every sale when you exceed the $600 sales threshold figure you essentially will have to end participation on ebay unless you have a business established for selling.

US income tax for individuals, in my experience, doesn't work like that Your reportable income that will be on the 1099 has nothing to do with your original purchase or computation of "profit" on the sale. What gets reported to IRS (or is supposed to be self-reported) is the money you earned during that tax year. To me (and Turbotax) it is actually fairly simple.

[drj52]

US income tax for individuals, in my experience, doesn't work like that Your reportable income that will be on the 1099 has nothing to do with your original purchase or computation of "profit" on the sale. What gets reported is the money you earned during that tax year. To me (and Turbotax) it is actually fairly simple.

Yes, the 1099 reports the total amount of your sales. But the original purchase price, as well as selling expenses, are deductible on Schedule C.

[BrianShaw]

Yes, the 1099 reports the total amount of your sales. But the original purchase price, as well as selling expenses, are deductible on Schedule C.

... as a business, isn't that what Sched C is about?

[Pete Roody]

... as a business, isn't that what Sched C is about?

the problem is i am not a business!


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[Bob Salomon]

the problem is i am not a business!


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IRS doesn’t care. What they care about is the profit you might make selling things. That’s why schedule C.

[Pete Roody]

IRS doesn’t care. What they care about is the profit you might make selling things. That’s why schedule C.

Yes agreed! But instead of selling on eBay, maybe I will go to a camera show and keep the IRS out of my back pocket!


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[Oren Grad]

IANAL and in particular IANATL. Seek professional advice! Purely as a heads-up re what you should investigate if this is an issue for you: personal property items are generally considered capital assets. Look at 1040 Schedule D and Form 8949, and the instructions for those.

https://www.irs.gov/instructions/i1040sd

https://www.irs.gov/instructions/i8949

[BrianShaw]

https://turbotax.intuit.com/tax-tips...lers/L7h6uJr0i