If You Make Money on Auction Websites, You May Have To Answer To The IRS
Online sellers who make big money on eBay or any other auction site, may have to answer to the IRS!
Karen Lenahan admits, she's an internet auction addict! She bids, she buys, and she sells. There is just as many sellers as there are buyers on auction sites like eBay. Many making big money selling all sorts of goods but beware. If you make anything over $400 in profits, you should file "c" and report the income to the IRS. That's right, buy selling your goods on eBay, you're making a profit making you a business owner. Your store front just happens to be in cyberspace.
Since internet auctions are a relatively a new area for the IRS there is no clear line that separates profit from a hobby from profit from a business. But the IRS does make one thing clear all income no matter where it's from can be taxed.
So you may have to declare the money you made from selling your goods, but now that you are essentially a business owner, you can deduct any fees you incur in making that profit...from travel expenses, to fees. The best thing to do is talk to an account to make sure you're doing the right thing.
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