taxation

[lmckec2009]

I believe ebay recently was asked by the tax dept to give details of sellers selling over $10,000 p.a. ( it used to be $20,000)

My postage is often $300-$400 per month if ebay includes the postage as a sales amount (now they have changed the rules)

Lots of us with much less than $10,000 actual sales will be on that list.

Thoughts please  

[bigbrickshop]

My thoughts ..

If your monthly postage costs are $300-$400 and you are buying stock to resell then you are operating as a business and your sales should be declared to the Tax Office (and Centrelink if applicable) regardless of what data eBay has to send to the ATO.

[putney32]

no matter what figure ebay report to the tax office, if you are a seller you would need to declare all your income to the ATO

that includes wages if you have a job

all sales and the income you have from charging your buyers postage.

you offset that with the cost of your item / ebays & paypal fees and the cost of your postage you buy from the PO as well as the cost of your packing materials etc.

thats it pretty simply put, your accountant will sort out the finer details for you but yes

postage received is an income

postage and packing purchased is an expenditure

[chameleon54]

With over 250 fixed price clothing items in your store and several hundred dollars in postage per month you would have a hard time convincing the ATO you where not running a business. SORRY but it is what it is.

P.S The new ten thousand dollar limit has been applied retrospectavily for the last two financial years.

[lane-ends]

OP is not asking whether they have to pay tax or not, rather whether they may be on ATO audit list.

In short turnover as far as ATO is concerned is money coming in inclusive of post. Listings whether as post added or free post may make the difference as to whether you are on Ebays supplied list.

Ultimately if you are around the 10,000 mark you are unlikely to be audited on Ebay reasons alone. They know 10,000 raises not much profit. So if you have other income they will just want to see you have declared something. TBH I believe they reduced it to 10,000 mainly to "frighten" lots of small sellers to actually get in the habit of declaring.

If this frightens off a lot of potential little sellers from thinking it is all too easy, then all the better to reduce my competition.

I am sure most people would prefer not to on an audit list regardless of how up to date their records are.

[asporty]

Surprising how many people jump for posting such as these trying to prove how honest and straight forward they are when dealing with ATO. In the course they forget what the original query was about, they just want to show off.

As for OP's query, I am also wondering about the same thing as ebay used to exclude postage costs in reporting to ATO. Would be worthwhile posing this question to ebay. Where did you hear about the lowering of limit?

[davewil1964]

It was advertised about a month ago. And a lot of members received emails to that effect. I assume you are not trying to divert attention by questioning the legitimacy of the notice.

Regardless of people trying to divert attention, if you make $1 from eBay or Facebook, or the markets, it should be declared as income if the purpose of the sale was to make a profit.

[chameleon54]

---

@asporty wrote:

Surprising how many people jump for posting such as these trying to prove how honest and straight forward they are when dealing with ATO. In the course they forget what the original query was about, they just want to show off.

---

asporty, Its not a question of "showing off " or "proving how honest I am ". People come to the boards seeking answers to questions which have legal reprucussions. If I am going to offer an opinion that people may act on, I do my best to advise what the legal position is. This does not mean I always agree 100 % with the ATO's position. My concern is if people offer their own interpratations of the law based on personal opinion of " what should be law "  instead of " what is law " people may read and act on the advice. If the advice is innacurate it could be very expensive and traumatic for the people concerned. I have expressed my own personal opinion on other threads which is, if a low income family make a few dollars to pay the school fees, or a pensioner makes some money to have a snitzchel at the RSL on Thursday night, good luck to them. If some-one is running a proffesional business turning over a reasonable amount, they should declare it. Obviously my personal opinion does not meet every single letter of the law, and I try not to let it influence opinions or advice I express on legal matters. I am not a trained accountant, but over the years have done extensive study in business management including taxation matters.  Many of the regular posters who take the time to answer questions are highly experienced people with a combined knowlege over a wide range of subjects. I will admit that some regulars become a little bit "comfortable" on the boards at times but in most cases I believe they share their experiences out of a genuine desire to assist other members rather than as a means of "showing off"

[asporty]

Thank you for the long reply.

Do note that most people here were not even coming close to answering what the OP asked for, Which has still not been answered re the postage part. Ebay historically did not include postage as part of the delared income to ATO. So it was always left up to individual members to work it out. I have been declaring it as income and my postage costs as expenses. So will be interesting to see how ebay reporting to ATO changes.

As for the change in thresholds, no I did not receive an email from ebay and I don't give two hoots about it as my reporting income is way above that margin. Still, I would like to keep an eye on what happens re tax situation given that ebay does not pay a cent to ATO in taxes.

So, does anyone here have an answer to ebay including postage in reporting? I guess not. I sent ebay an email yesterday so lets see what they have to say about that.

Cheers till then.

[chameleon54]

Posts on other threads on this subject indicate that other members believe once the postage is built into the sale price it will be classed as income for ATO purposes and subject to taxation ( and expenses claims ) and included in the current ATO $10,000 threshold for ebay to report sellers income to the ATO. I am 98% sure this is right but hav'nt commented specifically before as I am not 100% certain. Lane ends made a very good point about the ATO using the $10,000 reporting limit to frighten and train people to be compliant. Is it possible that in future ( maybe even today ) the ATO will have the computing capacity to cross reference ALL income recieved by people and will be able to do much more detailed and accurate cross referencing  Could they be training us up for the future digital ( cashless ) age when taxation and social security payments are managed with much more surgical precision than the blunt instruments currently used ? So long as the appropriate safety nets are in place this could actually be much fairer, but may stifle the incentive for those on benefits and low incomes to improve their personal financial positions through small scale ebay trading..