Ebay tax reporting drops from $20,000 to $600

[BobC]

Originally Posted by Exhibitman

Paying taxes you owe isn't new. The only thing that is new is eBay reporting our sales to the IRS directly so they can catch scofflaws who do not report their income or pay taxes on their profits. If you maintain accurate books and declare your income from cards already, the 1099 is a popcorn fart. I get dozens of them every year (lawyers get 1099d for everything) and just toss 'em in the shredder since I have accurate books I can document as needed.

Note that taxes are paid on profits, not gross receipts, as Bob pointed out. If you sell a card for $10 that cost you $9 you pay tax on the $1 profit. If that puts you at a loss with eBay fees, you need to be in a different business because your margins are too thin.

Adam,

You need to incorporate so they don't have to send you 1099s anymore. LOL

For the ones you do get though, I hope you at least take a quick look at them before they are shredded. In the past, I've had clients get 1099s that reported incorrect amounts, and we'd contact the issuer to get it corrected before filing my client's tax return so it didn't screw things up. You never know!