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How to file tax report when you sell something online?

  • I sold stuffs last year (2009) online thru third party websites such ebay, etc and got pay thru Paypal. I made more than $5000 at that time. But then, i don't do any online selling anymore. My questions are: 1. Do i have to file tax return report for that money i make? 2. As what i have to file, self-employment, independent contractor, or else? 3. Since i did that myself, i don't have any 1099? 4. What form should i use to file tax report in this case? Please help with the valid answer. I am so confused about it how to report that in my tax return report this year. Sometimes, i think i may not need to file the tax report because i just did the online business 2009 and never do it anymore. So, this is not a kind of a continuing and repetiting business. And also, all payments were thru Paypal, how does IRS know? :) I might be wrong. Please give me enlightment. I just wanna pay the taxes if i have to pay it, but i just don't know how to do it in my case. Thanks.

  • Answer:

    You would fill out a Schedule C. You claim the income and subtract out all of your cost of goods and all of your expenses to run the business. The longevity of the business is meaningless. If you opened a hotdog stand for one day you'd still file. Depending on your expenses it could take you into a loss and you may have an offset to your other income. 1. yes 2. Schedule C as a sole proprietor 3. right you don't 1099 yourself 4. Schedule C

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If what you were selling was just some of your old stuff, and you weren't making a profit on it but were selling for less than you paid for it, then you don't report it or pay tax. If you were buying or making things to sell, use form 1040, and schedules C and SE. You'd get the amounts of your sales and expenses from your own records.

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