Do you have to claim this on your taxes?

[disneysteve]

Would this also open a window to deduct part of your internet usage? as you use to earn this money? It is part of your job.

Absolutely. I've deducted a portion of my internet usage and my computer when reporting my ebay income. No reason you couldn't do the same with your survey income. It is considered a form of self-employment.

[TurningColorz]

Absolutely. I've deducted a portion of my internet usage and my computer when reporting my ebay income. No reason you couldn't do the same with your survey income. It is considered a form of self-employment.

I wonder how many other ebay sellers claim thier income?
Can the IRS audit your ebay and PayPal accounts? It seems like there's enough money being transacted on ebay to arrouse the IRS. Now that I think about it, I don't remember getting a statement of interest earned on my PayPal Money Market account. Hmmm.

Mike - TurningColorz

[sweeps]

The IRS has been trying to get ebay sales data. But keep in mind many sales on ebay are not taxable events. If I buy something new for $100 and after some time sell it on ebay for $100 or less, there was no profit on that.

You definitely should be getting a 1099 for your Paypal money market interest. Maybe the form got lost in the mail?

[disneysteve]

I don't remember getting a statement of interest earned on my PayPal Money Market account.

Did you earn at least $10.00 in interest? Often, banks won't send a 1099 for less than that. You can log on to your account and print the 1099 yourself, though.

But keep in mind many sales on ebay are not taxable events. If I buy something new for $100 and after some time sell it on ebay for $100 or less, there was no profit on that.

Keep in mind that a transaction being taxable and being reportable are two different things. Let's say that throughout the year, you sell 5 of those $100 items per month. You've made no profit but at year end there will be $6,000 in your account that you didn't have before. If you are the victim of an IRS audit, you can be quite sure they will want to know where that money came from. I occasionally sell items at a loss, or sell personal items for less than I originally paid. I still report those transactions. I just don't owe any taxes on them.

[TurningColorz]

Ok, I found my PayPal 1099 in last years taxes.
It's well over ten dollars, but thanks for reminding me of the $10 threshold, I forgot about that limit.
Nice article sweeps! I should have known the IRS was on top of it. Eventually, when they're in a position to act on it, I imagine they'll offer some kind of "Amnesty" for those who "come clean" ahead of time. I imagine the easiest thing for the feds to pick-up on would be unreported income, any more than that would require a formal audit, and some legwork.

Mike - TurningColorz