selling items on eBay is just
like the income you get
from any other business: it
is taxable, at least in
theory. In practice, many
get away without declaring
profits from their eBay
sales just because they're
hard for the government
to track. If you want to be
strictly within the law and
legit, though, you should
be paying tax.
Income is Income.
If you make money from it,
then it's income – and if it's
income, then it's taxable.
There is a question of scale
involved, though, where
the more you've sold, the
more important it is to
declare your eBay income.
If you don't, you risk
getting yourself into all
sorts of trouble.
There are some rules for
deciding whether your
income counts as taxable
or not. If you depend on
the income you get from
eBay, spend a lot of time
on it, or just act as if you
are running a business,
then you need to file a
Schedule C tax form and
pay tax as a business.
How Do I Work Out How
Much to Pay?
The 'income' you make
from eBay is how much
profit you make.
Remember that you can
subtract absolutely all of
your costs from this
income, like this.
Sale price - cost of item -
eBay fees - PayPal fees -
cost of postage - cost of
packing materials =
income.
For example, let's say you
sell CDs for $10 each,
including shipping. You pay
$5 for the CDs at
wholesale. That's $10 - $5
(cost) - 25c (insertion fee) -
52c (final value fee) - 30c
(PayPal fixed fee) - 29c
(PayPal percentage fee) -
37c (stamp) - 50c
(packaging) = $2.77
income.
For reference, eBay's final
value fee on a $10 item is
5.25%, while PayPal's cut is
30c + 2.9% for most sellers.
These numbers will vary
depending on the value of
what you sell and the kind
of account you have.
When you work this out at
the end of the year, you
can calculate your overall
price for all sales, and then
work out how much of
that you actually received,
remembering to adjust for
non-paying buyers. Then
just subtract what you
spent on shipping and
packing. There's no real
need to do tax calculations
on a transaction-by-
transaction basis, although
it is advisable to keep a
printed record of
everything you buy and
sell.
However, there could be a
few advantages to paying
tax on your eBay sales –
you might be able to make
it back through deducting
tax on your business
expenses. All of the costs in
the sum above that aren't
profit are business expenses
and so tax-deductable. You
may also be able to deduct
the cost of any computer
equipment you buy, as well
as ink and paper for your
printer. You could even try
something a little unusual,
like deducting the cost of
renting your home office
from yourself.
Whatever you do, though,
don't just rely on the
information in this email. If
you want advice about tax
issues, you should really go
to an accountant.
Another way to make back
the money you spend on
tax, of course, is to simply
make more profit on each
item to begin with. Our
next email will show you
how to get more bidders
with the power of pictures.
POSTING BERKAITAN
masih 0 komentar untuk Is Your Ebay Income Taxable?
Post a Comment