# Taxes on Paypal sales?
**URL:** https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910
**Category:** Unrelated Discussion
**Created:** [February 10, 2021, 2:37pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910 "2021-02-10T14:37:32Z")
**Posts on this page:** 14
**Page:** 1
### Author:  [@bpelletier](https://forums.yoyoexpert.com/u/bpelletier)
#### Post date: [February 10, 2021, 2:37pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/1 "2021-02-10T14:37:32Z")
Does anyone know if paypal sales and or auction site sales need to be reported to the irs for taxes? This is my first year selling on here via paypal and through the auction site
---
### Author:  [@TheThrowingGnome](https://forums.yoyoexpert.com/u/TheThrowingGnome)
#### Post date: [February 10, 2021, 3:04pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/2 "2021-02-10T15:04:41Z")
Good question. I’ve never reported them. :thinking:
---
### Author:  [@Kray](https://forums.yoyoexpert.com/u/Kray)
#### Post date: [February 10, 2021, 3:12pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/3 "2021-02-10T15:12:50Z")
I am not in the US but normally in the EU it would work like this:
If you have a steadily income from selling Yo-Yos over several month you need to declare it as business. And yeah if it is a business you need to pay tax.
I would assume it works more or less the same in the US.
Normally it is also very much related on how much you make from your normal job and how much from selling yoyos. So if your monthly income from yoyos is significant higher then your normal salary it is a business.
---
### Author:  [@BadWolfeCo](https://forums.yoyoexpert.com/u/BadWolfeCo)
#### Post date: [February 10, 2021, 3:20pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/4 "2021-02-10T15:20:03Z")
Here in TN, if you make over $4000 in a year you have to get a business license and collect sales tax. I’m sure it varies from one state to the next, so check your local laws. But I’d guess most states are pretty similar, its based on a dollar amount, it doesn’t matter if it’s your primary source of income or not.
---
### Author:  [@MarkD](https://forums.yoyoexpert.com/u/MarkD)
#### Post date: [February 10, 2021, 4:04pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/5 "2021-02-10T16:04:21Z")
If you aren’t selling as a business, it falls under hobby income:
> **[Five Things to Remember about Hobby Income and Expenses | Internal Revenue...](https://www.irs.gov/newsroom/five-things-to-remember-about-hobby-income-and-expenses)**
>
> IRS Tax Tip 2017-80, November 21, 2017 From scrapbooking to glass blowing, many Americans enjoy hobbies that are also a source of income. A taxpayer must report income on their tax return even if it is made from a hobby. However, the rules for how to...
You can deduct hobby expenses from the hobby income, so it’ll probably come out as a wash if you bought more yoyos than you sold.
---
### Author:  [@NathanC](https://forums.yoyoexpert.com/u/NathanC)
#### Post date: [February 10, 2021, 4:07pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/6 "2021-02-10T16:07:42Z")
But that’s profit, which is very different from sales. Unless someone is running a yoyo company, then they’re unlikely to make any net profit off of buying, selling, and trading of yoyos, especially once shipping and fees are factored in. PayPal only sends out 1099s for goods and service transactions, so F&F isn’t included. Most states have a $20k threshold which is no big deal, but VA, IL, MA, VT, and possibly a few others have thresholds as low as $600. You will want to report this on your taxes, as PayPal sends a 1099 to the IRS which will need to be accounted for, but it won’t actually cost you any money in taxes as you weren’t profiting or running a business (unless you were, in which case yes lol).
---
### Author:  [@BadWolfeCo](https://forums.yoyoexpert.com/u/BadWolfeCo)
#### Post date: [February 10, 2021, 4:19pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/7 "2021-02-10T16:19:06Z")
That’s good to know, as I’m probably gonna hit the $4k gross mark this year lol. But so much of what I make goes back into supplies, it definitely won’t be that much profit unless I somehow blow up like crazy. Last year I still counted it as self-employed income, but with all the deductions for supplies I’m pretty sure I ran a net loss 🙃 If I’m not mistaken, I think it actually helped on my taxes, rather than hurting.
---
### Author:  [@fatguysnacks247](https://forums.yoyoexpert.com/u/fatguysnacks247)
#### Post date: [February 10, 2021, 4:40pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/8 "2021-02-10T16:40:51Z")
Excellent topic @BadWolfeCo
& great resource @MarkD
There are probably some hobbyists that stretch much further into what would be considered the ‘business’ category than they realize or intend, especially when you get into much more high-dollar collectibles, or are moving around higher volumes than most of us are. I’m happy this came up.
I’m very intetested to hear what some folks’ experiences have been.
---
### Author:  [@KNOMAD](https://forums.yoyoexpert.com/u/KNOMAD)
#### Post date: [February 10, 2021, 5:02pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/9 "2021-02-10T17:02:05Z")
If you do report, better keep track of costs for them write offs!
I have a small business that saves me a TON.
---
### Author:  [@jhb8426](https://forums.yoyoexpert.com/u/jhb8426)
#### Post date: [February 10, 2021, 5:08pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/10 "2021-02-10T17:08:13Z")
For paypal/ebay it depends on the amount of business you do. I have a friend who sells things pretty regularly on ebay. He commented in October that he was going to cut back a bit because he was getting close to the limit for a 1099. I don’t know what the amount is, it’s probably on their website.
---
### Author:  [@bpelletier](https://forums.yoyoexpert.com/u/bpelletier)
#### Post date: [February 10, 2021, 5:20pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/11 "2021-02-10T17:20:07Z")
thanks for the info guys ive seen various things from it has to be over 20,000 for PayPal to report it to the irs, to anything you’ve ever sold has to be reported… ive made at most 600 probably a lot less, and i only sell every few months if that, so id hardly consider it income or “business”, im not planning on reporting simply because i dont have all the info from past purchases, but it would be a shame to be investigated over yoyo sales lol
---
### Author:  [@jhb8426](https://forums.yoyoexpert.com/u/jhb8426)
#### Post date: [February 10, 2021, 6:08pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/12 "2021-02-10T18:08:42Z")
Yes, the paypal site lists the amount as $20,000/yr for reporting to the IRS. They also say that more than 200 transactions (sales)/yr will also trigger it.
---
### Author:  [@fatguysnacks247](https://forums.yoyoexpert.com/u/fatguysnacks247)
#### Post date: [February 10, 2021, 6:28pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/13 "2021-02-10T18:28:10Z")
that’s one thing i started thinking about, and doing… recently. i have a yoyo drop - could be a flop, whatever - it is still falling into my hobby category i guess. but unfortunately i’m not working either, so if i do crap the bed in this… at least i have something tracked. if it still falls
in standard deduction (which most hobby stuff, when added all with everything else tends to do in my cases) - no biggie… if not, maybe i’ll have a few bucks at the end of the year to buy some
new sheets 🤷🏼♂️
---
### Author:  [@NathanC](https://forums.yoyoexpert.com/u/NathanC)
#### Post date: [February 10, 2021, 11:57pm UTC](https://forums.yoyoexpert.com/t/taxes-on-paypal-sales/333910/14 "2021-02-10T23:57:56Z")
Hobby losses are not tax deductible. Whether you break even or lose thousands has no bearing on your taxes. If you’re running a small business then it’s different. Furthermore while the federal limit for reporting 1099s to the IRS is $20k, which it should be noted is just the limit at which they require companies to report to them and has nothing to do with tax liabilities, many states as mentioned have much lower thresholds which is why you may get a 1099 despite doing well under $20k in gross sales.