Recordkeeping for Online Auction Sellers |
|
Recordkeeping
Good records will help you monitor the progress of your business, prepare your financial statements, identify the sources of your receipts, keep track of deductible expenses, prepare your tax returns, and support items reported on your tax returns.
Information Reporting
The Housing Assistance Act of 2008 (HR 3221) requires payment settlement entities to perform information reporting (file and issue Form 1099-MISC) on payment card and third-party network payment transactions starting in tax years after December 31, 2010. Starting in tax years after December 31, 2011, these payments will be subject to back-up withholding.
For online auction sellers this means that your credit card and e-payment sales will be reported annually to you and to the IRS that exceed the dollar and transactional threshold. The de minimis payments rule exempts the first $20,000 and 200 transactions from information reporting. (Internal Revenue Code Section 6050W(e)) However, even if you do not receive an information return, your online auction sales that are less than these amounts generally are still taxable.
Filing a Schedule C for Your Online Auction Seller Business
This link takes you to an IRS video on Who Needs to File a Schedule C and How to do it. A transcript of the video is also available online.
References/Related Topics
Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.
|
|
|
Page Last Reviewed or Updated: January 23, 2009