11-13-2011, 05:41 PM
Doing taxes on sales can be complex. To do it properly, you need to keep accounts for inventory held, cost of goods sold, etc, and calculate your profit accordingly. If you don't hold inventory, but sell immediately, the calculation is simpler.
If your sales are very small, the IRS will likely not care if you consider this sideline to be a "hobby" that you don't report. If your gross sales are above $20K, then the IRS definitely does care.
From a letter sent to me last April by PayPal.
If your sales are very small, the IRS will likely not care if you consider this sideline to be a "hobby" that you don't report. If your gross sales are above $20K, then the IRS definitely does care.
From a letter sent to me last April by PayPal.
Starting this year, a new IRS rule requires all U.S. payment providers, including PayPal, to report sales information to the IRS about certain customers who receive payments for the sale of goods or services.
Under the new rule, PayPal is required to report the total payment volume received by PayPal accounts in the U.S. that:
· Receive more than $20,000 in gross payment volume from sales of goods or services in a single year, AND
· Receive more than 200 payments in the same year.