eBay/Amazon taxes


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Hello,

So this year I did about $4500 in sales on Amazon and my account was linked to my personal bank. My amazon account has my SSN. Amazon only sends out 1099s if you pass 200 transactions/$20,000. Which I did not.

My questions are this.

Do I have to report this income? If so, what sort of taxes am I liable for? Do I have to pay sales tax on this? Income tax?

Also, what if my receipt for the products are from the year prior to the year in which the sales were made. Are paypal / credit card transactions enough to use as deduction / expenses.

If I sold an item for example a Pepsi. Do I report that as "Soda" or "Pepsi"

Another question.


I sold some other items on my eBay account which is linked to my paypal account. I withdraw about $1500 to a bank made separate for my ebay sales. Sales were about $4000 but profit about $1400 maybe. My SSN is not on this eBay/Paypal.

Do I still have to report this income, or is it considered a hobby?
 
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You have to report the income, even if it is a hobby. Doesn't matter if they are issuing you 1099s or not, that doesn't relieve your responsibility.

Unless you have nexus and are registered to collect sales tax, the payment of use tax is the responsibility of your customers.

What is it? Is this a hobby or a business? Do you plan to make a continuous profit? This is a facts are circumstances determination and only you have the facts to establish that. If the IRS renders the activity as a hobby, you will not be able to take losses on the activity and will only be able to limit any expenses (including inventory) on Schedule A. You still must report the income.

You likely qualify to use the cash basis, so you would pick up sales in the year the receipts were received, rather than when the sale occurs. This would be the opposite if you elect to use the accrual basis. You would also need to keep track of inventory and cost of goods sold if using accrual and recognize the cost of the inventory at point of sale.

It sounds like you have a lot of basic questions and misconceptions. I would go to a qualified preparer or CPA and save yourself some big problems down the road.
 
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