If you routinely sell on eBay or Craigslist, the IRS will be looking for tax money from you. If you sell a couple items a year, no worries. But if you’re a frequent seller, they will expect you to report the income, net of expenses, that you make.If the IRS finds you and you haven’t reported the sales, you’ll get eaten alive. The Fiscal Times reports that the IRS will disallow you any expense of sales and treat all your profit as income subject to tax. In addition, new reporting requirements going into effect next year will make it easier for the IRS to find you.
For a lot of people, they’re going to have to shift the paradigm they have in their heads about eBay and Craigslist selling. You’ve got to understand that selling online is not merely a hobby; it generates reportable income.
People who sell in excess of $20,000 annually will be targeted most heavily by the IRS. Yet no one is entirely safe, unless you truly are a very infrequent seller. “The intent and frequency of the sales determine the taxability, not just the dollar amount,” the executive director of H&R Block’s Tax Institute tells The Fiscal Times.
You may laugh and think the IRS will never track you down. That’s up to you. But a word to the wise: Keep accurate documentation of the costs of goods sold and costs of selling those goods so you don’t get your clock cleaned.
{Fiscal Times/Noam Amdurski-Matzav.com Newscenter}
