Just to clarify, you are still required by law to report your earnings to the IRS whether they hit the 20/200 threshold or not. They have access and can audit. Not trying to be a dick, but spreading false information about taxes will get someone screwed.
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Learned a lot from your tip, looking forward to future ones.
Thank you for your contribution!
So if you have $20k of purchases through eBay you get taxed?
I don’t know why my question deserved such an antagonistic response, I meant no offence by it. I was only trying to find out the financial implications of taking on such an enterprise, as your initial cost-profit analysis didn’t seem to take this subject into account.
It would seem from the multiple responses and subsequent discussion that actually this is in fact a very good question, contrary to your dismissiveness.
Purchases aren’t taxable.
$20,000 receipts through Paypal AND 200 transactions and they will report your gross receipts to the IRS. Regardless of your volume and gross though the IRS is still legally due tax on any gains you made.
When i said purchases I meant purchases on your PayPal. So if I received a total of 20k all up from people buying stuff off me I won’t get taxed ?
While we’re at the tax subject anyway… How does it work in the US? Do you get taxes on profits per item, or is it on a periodic (yearly, etc.) basis? I suppose it’s very difficult to calculate profits of an item if you buy in bulk, etc.
You are taxed on ANY income you make. Paypal will report your earnings to the IRS via 1099K IF you reach $20,000 GROSS sales and 200 unique transactions. Regardless of IF you receive a 1099K, that income should be reported on your taxes as you can be audited for evasion. They don’t care about your net sales etc, you can write off certain things like based on the type of entity you are, they only care about the Gross amount which is reported and should be.
For anyone who STILL doesn’t understand, you are ALWAYS supposed to report any type of earning from sales (some exceptions apply), hence why people love cash sales since they are harder to track.
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If you receive money then it is a sale. $20,000 in sales AND 200 transactions will be reported.
$20,000 in sales is taxable regardless of whether it is reported or not. You are allowed to deduct off cost of goods sold and other costs needed for the business activity obviously though too. Depending on your state laws you may also have to collect and remit sales tax in some cases as well. Myself being in NY I have to collect NY sales tax on all sales within my own state.
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What about Australia 
I don’t sell much myself but interesting to know
@jakew1992 I have no idea about other countries. Maybe start with this link and then consult a tax professional or regulatory agency in your country.
www.ato.gov.au/Business/Starting-your-own-business/In-detail/Online-selling—hobby-or-business-/
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I was dismissive because of the WAY you wrote it. You provided zero clarification or context as to why you were asking it and it was a close ended question. I could have answered “yes” and that would have been the end of it and you would have been left with no more information than you started with. Therefore, by objective reasoning… no your question was not a “good one”. Also, you just jumped in all Leeroy Jenkins-like asking about personal stuff without declaring your intent or developing rapport with me first before asking about personal stuff.
The dismissiveness comes from my perception of not knowing your reasoning why you are asking what you are. Stop playing the victim here and go back and look at the way this unfolded objectively.
Starting to see why 1by1collector wrote this.
A smart person once said (about opinions), “Everyone is going to have an opinion about you. Opinions are like anchors on your life. You should only value the opinions of those you wish to switch places with”. We’re unfortunately just not in alignment and therefore we aren’t going to be a good fit. Rather than let this devolve into something destructive, I think I’m just going to block you now. Have a great day.
(Edited quote for context)
LEEEEEEROOOOOOYY JEEEEEEENKINNNNSS
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Blocked for asking an honest question that sparked an informative and relevant discussion. Nice guy.
I completely agree the question is relevant in a general context (i.e. do all sellers have to pay taxes on their income from selling on eBay?), but asking tnols specifically if he pays taxes on his income almost comes of as accusatory since by U.S. law, all income is taxable and must be reported.
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Also…I looked up the population report of Dark Dragonite and Dark Tyranitar for these decks and the population for 10s are awfully small?
PSA 10 Dark Dragonite holo - Pop 6
PSA 10 Dark Tyranitar holo - Pop 6
So assuming these are all yours and you paid $30 a deck in the past years and sold the 10s for ~$200.00
Grading $8 a card
Deck $30
$38 investment
Selling $200
shipping $2.50
Fees (ebay/paypal) -~$27.00
~$180 sale
$180-$38 = $142
$142 x 12 (assuming those decks are yours and you graded perfect 10s in all your investments) is $1704 assuming everything is perfect.
At 9s, we will say $50 sales.
Total of pop 27 between the 2, would be $50-$38-$5-$1-$2.5 = $3.50. $3.50 X27 (assuming they all belong to you and sell for $50 like you said, thats $94.50. Add in the 10s and you end up with ~$1800 over the course of a year +.
Lets assume its only a year, your trade secret is $150 a month (give or take a little extra based on the bulk cards).
Just pointing this out, this secret is equal to 5 hours a week at a minimum wage job in the states.
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Yeah it’s not a bad way to make some beer cash and if you take the concept and apply it elsewhere, you can prob come across with a lot more than $150 a month. I’d think the hardest part would be the initial investment of time. Grabbing the cards and submitting them is all well and good, but the PSA returns take forever. So until you’re at a point where you’re getting cards back every month while sending new ones in every month, it’s not gonna have that “feel” of a monthly return on investment.
This is also in context of all other trade secrets/strategies tnols has – this is prob the most insignificant one too (but a great example) since you can’t make money on something when everyone else starts to catch on 