Comments on: Do eBay Sellers Need to Pay Self Employment Taxes?

By: ParatrooperJJ

ParatrooperJJ — Tue, 15 Jan 2008 15:13:47 +0000

As a point of information, working as a merc does not violate the Logan Act. Only recruiting for soldiers to fight under a foriegn flag does.

By: Brandon

Brandon — Mon, 14 Jan 2008 19:49:23 +0000

Bloggers do need to play self-employment taxes as well.

By and by, the reason that the partner is being hit harshly is that, as I understand it, he is just facillitating the sale rather than having any stake in the original cost of the item.

By: Tom

Tom — Sun, 13 Jan 2008 21:15:09 +0000

Bloggers who receive income from ad revenue also need to pay self employment tax then, right?

By: Ben

Ben — Fri, 11 Jan 2008 03:08:58 +0000

Good point GeckoGirl, thanks for bringing it up. The key there is to save your receipts so that you can prove how much you paid for it. A lot of people sell things for a loss on eBay just to get rid of them and free up some extra cash. That money isn’t a profit so it’s not taxable.

Andy, it’s possible to make thousands of dollars a year selling on eBay if you know what you’re doing. You are right, if you’re setup as a business you can deduct business usage of things like your internet access but you have to be careful to follow the rules of the tax code in terms of documentation and proper deductions. I’ll write more about that next week. If you’re looking for an ultimate guide to eBay taxes I’d recommend the eBay Tax Tips book.

By: Andy

Andy — Thu, 10 Jan 2008 18:09:52 +0000

Out of interest, if Uncle Sam is taking your ebay use then can you count the cost of your pc, internet access, office chair and desk as business expenses – I’m sure that would take the profit down under $400 unless you are making TONS of money from ebay.

By: GeckoGirl

GeckoGirl — Tue, 08 Jan 2008 15:33:14 +0000

eBay sellers should note that only their PROFIT is considered income. If I bought a coat for $100 several years ago ago and then sell it on eBay for $50, that is NOT considered income because I didn’t sell it for more than my basis in the item. However, if I buy the same coat almost new at a thrift store for $20 and resell it on eBay for $50, the $30 profit is considered income.

By: Jeremy

Jeremy — Tue, 08 Jan 2008 00:27:06 +0000

You can deduct half of your SE tax in figuring your adjusted gross income. This deduction only affects your income tax. It does not affect either your net earnings from self-employment or your SE tax, but at least you can recover a little bit of that SE tax in the form of a income deduction.

But I see this kind of shock from people who go into business for the first time a lot. It can be a bit frustrating if you aren’t prepared for all of the tax you’ll likely need to pay, so like you said, keep good records so you can maximize deductions.

By: Minimum Wage

Minimum Wage — Mon, 07 Jan 2008 21:58:39 +0000

Q: Do soldiers of fortune need to pay self-deployment taxes?

A: Yes, however, Americans employed in this line of work are violating the Logan Act, therefore none of their expenses are deductible.