Member Workshop: When Does Your eBay Hobby Become a Business? - July 28 in Community Help Boards in Community

Last Post Jul 28, 2008 11:01 AM by: deirdre@ebay.com

Replies: 102

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jun 29, 2008 11:14 PM

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Topic: Member Workshop: When Does Your eBay Hobby Become a Business?

Host: dkennedycpa
Date: Monday 07/28
Time: 10:00 a.m. to 11:00 a.m. Pacific time
Location: Workshop Board

Description: When do you have to report the money you make from a few eBay sales? Does eBay report the sales? These are some of the frequently asked questions we get again and again. Please join best selling-author and CPA Diane Kennedy to learn how to turn those sales into a real business that means you pay less tax – not more.

Cheers,

Deirdre
eBay Community Development

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Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:10 AM

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Hello. My name is Diane Kennedy. I’ve been a CPA and Tax Strategist for over 25 years. My specialty is working with small business owners and real estate investors. My tax education company, Tax Loopholes, LLC, teaches people through books like Tax Loopholes for eBay Sellers, tapes and seminars on how to take advantage of the legal tax-reduction strategies that available to everyone. Please remember that laws and practices vary from state to state and if tax, accounting, legal and other specific expert advice is required, the services of a professional should be obtained.

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:10 AM

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When the government wants to promote a specific public policy it often uses tax breaks to get the public interested. After all, who doesn't want to pay less taxes? There are two things that the government wants you to do: (1) Start a business and (2) Invest in real estate. So, to encourage you, the government offers all kinds of tax breaks. Because these tax breaks are sponsored and created by the government, they're safe, legal, and meant to be used.

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:10 AM

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eBay has generously set aside time for us to present these business-related sessions designed to help you make more and keep more money. We have a new workshop every month. Mark your calendars!

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:11 AM

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Today we're talking Today we're talking about “Becoming a Business.” Many sellers on eBay don't realize that they have created a business and that the income they are earning needs to be reported. Of course, creating a business also means getting to take advantage of all of the business tax breaks, too!

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:11 AM

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Just before we get started, I want to tell you about this month's free offer. The first 10 people who post on this workshop will be entitled to receive a free copy of our new download, 1000 Deductions, Tax Credits and Tax Savings . We'll be tracking posts throughout the workshop and will announce the recipients at the end, together with instructions on how to get your free download.

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:11 AM

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Now, on with the workshop!

I’m always curious about people’s start-up stories. How do people go from selling a few things in the garage to making millions selling land on eBay? How do people get into eBay specifically as a viable business opportunity, and how many people get into it by accident - selling a few things here and there to make a few extra dollars or get rid of some stuff, and turn around one day and realize they have a full-fledged business on their hands. (Tell me your stories!! I’d love to receive them at Carolyn@taxloopholes.com)

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:11 AM

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I love "accidental" business owners, because for the most part they tend to be people who've been having so much fun along the way that they didn't even know they were creating a business. One day they wake up and realize the activity that they've been casually noodling around in has turned into a major source of income: in some cases even replacing their regular day jobs!

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:12 AM

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Here’s the thing though: when it comes to business, the rules are the same for the smallest business as they are for the largest. And a lot of the benefits are the same, too – small businesses have access to the same range of tax deductions, tax credits and tax savings as the largest company. The only difference is the size of the deduction. To start taking advantage of the opportunities, though, you’ve got to know some things ahead of time.

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:12 AM

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When Do a Few Sales Become a Business?

This is one of the most frequently-asked questions I get at seminars and workshops. And the answer is, technically: "When you make your first sale." Of course this isn't the answer that most people want to hear! But then again, that's not the question they're really asking, either. The question (okay, two questions) that these people are really asking are, "Do I have to declare the money I'm making," and "Do I have to pay tax on it?" And those answers are, "Yes," and "It depends."

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:13 AM

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Let's start with the first part of that question: "Do I have to declare the money I'm making?" That answer is unequivocally "yes." The IRS doesn't care where the money came from, or how you made it. But it does care that you tell them about it. Everything should be declared.

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:14 AM

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Of course, having said that, the idea of legions of IRS agents monitoring garage sales across the country and dragging thousands off to jail is unlikely to say the least. But while the IRS won't normally waste its time with someone who holds a garage sale once every couple of years, it isn't blind to the money moving through eBay. With approximately $2 billion in sales per year, eBay may prove to be too tempting a target to leave undisturbed for too much longer.

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:14 AM

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As for the second part of the question, "Do I have to pay tax on it," the answer is "it depends." It depends on whether or not you want to operate as a business, and whether or not you're taking advantage of all of the tax incentives that are available.

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:16 AM

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When a Business isn't a Business. You are in business if you are carrying out an activity with the intent of making a profit. Whether or not you make a profit isn't important at this point - the question is one of intent. On the other hand, a hobby is something you enjoy doing without an expectation of making a profit.

Diane Kennedy, CPA
www.taxloopholes.com

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Jul 25, 2008 9:16 AM

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A hobby business may be something you do to make a little extra money, but it doesn't necessarily exist to make a profit. Sewing baby clothes or acting as a hunting guide could easily be hobby businesses. In both cases you are doing something that you enjoy and would be doing in any event. You don't keep any special records, and probably don't have any special bookkeeping procedures in place. The money you make gets deposited into your personal account, and you spend your own money on supplies and things you need to carry out your hobby. You don't prepare financial statements, and (hopefully) declare the extra income in excess of expenses on your tax return.

Diane Kennedy, CPA
www.taxloopholes.com

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Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28

Member Workshop: When Does Your eBay Hobby Become a Business? - July 28