Taxes - And Your Online Business

(E-bay And Other Buy And Sell Sidelines)

Most people think that the Internet is really a great

venue for earning extra income or for generating extra

money through sidelines such as buying and selling,

auctioning, etc.

Most people also believe that transacting small

sidelines or business transactions through the

Internet requires no tax.

However, the truth of the matter is, there are

actually taxes that are due for every item purchased

or sold through the Internet.

Taxes and your online business (if you have one or

planning to have one) should work hand in hand for you

not to get in trouble with the government.

Is Your Online Buying And Selling A Hobby Or A

Business?

Majority of the people who are involved with E-bay

buying and selling would try to say that they don

really have to pay tax from what they earn through the

Internet because they are only treating it as a hobby.

However, agents from IRS would say that whether it is

treated as a hobby or a sideline business, taxes

should be strictly implemented.

While you may think that doing business on eBay is

just something you may consider as a fun pastime, the

money that you made, are making or will make is

actually still valid to reported as income.

You need to consult with the IRS people first before

you can truly say that you are exempted from paying

taxes while you are participating in your online

business.

You see, everyone seems to love making money but when

the time comes that they have to pay their due taxes

to their beloved country, they try almost every

possible way to escape paying their taxes.

If you have your so-called online business, you should

be aware of the rules of the IRS: one is required to

pay taxes on all business and personal income and that

includes the dough you make selling stuffs on the

Internet.

Simple Earnings Still Require Tax (Sniff, Sniff)

As heartbreaking as this may sound, even the simplest

business transaction made through the Internet needs

to be reported as "income".

For example, you bought an exquisite looking flower

vase at a flea market for $5 and then you decide to

sell it an eBay for $20. You manage to sell it for $20

so that means you had a $15 profit which would then

entail you to report it as income and pay your taxes

as fair share.

Realistically speaking, if you don treat eBay as a

serious and constant venue for your online business,

then perhaps you can get away with selling a few items

every now and then without having to worry about the

IRS tracking you down with their questions about tax

dues and other stuffs.

However, if you are a consistent chap at eBay, then

the IRS people might categorize your eBay

participation as something that is business oriented

and you may end up being required to file a Schedule C

form and claim the income that you have spurred.

If you are fond of doing business at eBay and other

similar sites, you may want to assess yourself by

asking yourself the following questions:

a.) Do I carry my "hobby" in a business-like manner?

B.) Do I spend considerable time working on my

"hobby"?

c.)Do I depend on income from my hobby for my

livelihood?

If the answer to all those questions are yes, then you

most definitely are not carrying a hobby, but in fact

a business. By finding out that you are already having

a mini-online business at eBay or other similar

websites, then you have to be responsible enough to

pay for your taxes on your income.

Remember that you have a responsibility for your taxes

and your online business.

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