Do I have to pay taxes on income earned outside US?

In general, yes—Americans must pay U.S. taxes on foreign income. The U.S. is one of only two countries in the world where taxes are based on citizenship, not place of residency. If you’re considered a U.S. citizen or U.S. permanent resident, you pay income tax regardless where the income was earned.

How do I report income outside the US?

Generally, you report your foreign income where you normally report your U.S. income on your tax return. Earned income (wages) is reported on line 7 of Form 1040; interest and dividend income is reported on Schedule B; income from rental properties is reported on Schedule E, etc.

Where do I report eBay income tax return?

If you and the IRS classify your eBay sales as a hobby, you’ll have to report the income on Form 1040. For tax years prior to 2018, you report your expenses are an itemize deduction on Schedule A.

How much can I make on eBay without paying taxes?

$20,000
Effective next year, sellers on certain online platforms like Etsy and eBay will receive a 1099-K if their sales are at least $600, down from the current threshold of $20,000 with a minimum of 200 transactions. Not all online sales are taxable, whether you receive tax form or not.

What states require eBay to collect sales tax?

From January 1, 2020, eBay will be collecting sales tax on eligible transactions for buyers in the following states; Arizona, California, Colorado, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Nevada, North Dakota, South Carolina, Texas and Utah.

Do eBay sellers have to fill out tax forms?

Foreign sellers conducting transactions in the U.S. are required to fill out Form W-8BEN for their income. This form is for reporting income and any reduced rate or exemption of withholding. According to eBay’s tax policy, sellers are responsible for any taxes from the sales they make on eBay.

Do you have to report eBay as a business?

If your eBay income is more than $600 and is a significant portion of your total income, then it’s in good practice to report those earnings. You’re considered a business if you spend a considerable amount of time on eBay selling items, and are reliant on the income that selling items generates.

Does eBay charge sales tax on shipping and handling?

Each state’s legislation dictates if shipping and handling are taxable or not. In those states where eBay is collecting tax, we will collect tax on shipping and handling where applicable. What states are sellers required to collect sales tax for?

Is selling on eBay considered a small business?

Using eBay to make profits is a business If you sell and buy articles on eBay in order to earn money, the IRS will likely classify your sales activities as a business. This means you will have to report net income from eBay sales.