You do not have to report sales under $20K a year, right?
August 29th, 2011 → 8:16 am @ Carol
A self-published author recently asked a question on a Yahoo forum
I met a few publishers the other day and the issue came up about paying taxes. Many of them do not report what they sell on Amazon or ebay, because of the law that you do not have to report sales under $20K a year. Is that how it is? That is completely new to me. I thought you have to report everything. Then again, if you sell as the ‘author’ (Marketplace) it is personal sales, not publisher sales, correct.
Does anybody know about this?
E
She’s been given some incorrect information. Fortunately, more knowledgeable people stepped in to correct her errors in thinking:
You must report from the first dollar of revenue. There is no “under $20K” exemption.
Talking to “a few publishers” casually is not a good source of tax information. You should either consult with the taxing agencies (state, Federal, or local) or with a qualified tax professional where your complete situation can be discussed. –Peter Masterson, former H&R Block Office Manager, Aeonix Publishing Group https://www.aeonix.com
Just because payment processors are not required to send you a form, has nothing to do with whether you MUST report that income. – Malcolm
The $20,000 number isn’t an indicator of when tax is due. Instead this is a new, and exceedingly burdensome regulation. Payment processors aren’t payors, they’re passing money through between one party and another. So they haven’t been filing 1099s. Now, they have to, if you’re doing more than a relatively modest amount of business.
Even if you don’t get a 1099 as an individual for any transaction, you’re required to report the revenue, the associated expenses and income, and file the return.
Your colleagues are in error in their interpretations, and they’re gonna get caught. When, not if, they do, it will be painful. Don’t follow them into this not-grey-at-all area. – Marion Gropen, www.GropenAssoc.com
Such good advice. Be careful out there, folks. Don’t trust other, ill-informed people who may unintentionally be misstating the facts.
Instead get reliable information form a tax professional. This website is a good start and so is my book, Business Tips and Taxes for Writers.
I also offer phone consultations to discuss your individual concerns.
Carol Topp, CPA
