Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

Ive been on SSDI for 8 years for a neurological disorder.

I've been on SSDI for...
I've been on SSDI for 8 years for a neurological disorder. This is my only income.

Last year (2012) I started dabbling with selling on Ebay. Not regularly and ended up just under $4000 gross sales and showing a loss of at least $1000. Approx 25 sales.

The paper trail is; purchase from auction site (not ebay) using my personal CC. Selling on ebay with payments going thru Paypal and goi ng into my personal checking acct. then paying my CC with that.

Around tax time this year I was educated abouit the reporting of sales from ebay and filing Sch. C, hobby/ business etc ... . I am at $10k in Gross sales and showing a loss of at least $1700 on 62 sales.

I am going to stop selling on ebay at this time.

-Not worth the hassle dealing with the Sch. C
- Can't make money between shipping/ebay/paypal fees
- Sometimes I can't walk to drop off packages.



My question (s)...

Am I able to call it a hobby and would that benefit me?
or...
Should I amend 2012 with a Sch. C and go into 2013 carrying the loss over and dissolving the :"business" ?
or..
Shouild I ignore 2012 and and just file Sch. C for 2013?

or...
Should I just stop and not file any Sch. C's?

and what penalty for not filing a Sch. C even though they are losses?
Show More
Show Less
Ask Your Own Tax Question
Answered in 4 minutes by:
8/22/2013
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,210
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified

Robin D. :

Hello and thank you for using Just Answer,
If you called it a hobby you would not be allowed to claim all expenses. In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business.
The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year. You have shown a profit for the past 2 years. f an activity is not for profit, losses from that activity may not be used to offset other income.

If you did not file and report the activity in 2012 then you need to amend the 2012 return. You said you had a loss, I am not sure if you mean that after expenses were counted your Net income was a negative $1000 or you had true expenses that totaled $1000.

Robin D. :

If you claim that the activity was a hobby and you had a true loss of $1000, you could not carry that forward but you woudl still be required to amend and report the activity.

Robin D. :

Hobby expenses are shown on Schedule A.

Robin D. :

You should not ignore the activity and the reporting that is required whether you have a hobby or a business.

Robin D. :

You need to amend your 2012 and report the income then show your expenses either way. It is always better to make your own declarations of income then to have the IRS question you later.

Customer:

Filed with TurboTax. Amend with them also or get an acct at this point? Will it tell me penalties?

Robin D. :

Most penalties are based on the amount of tax owed. You can use TT to amend the return. If there are penalties the system would advise on the amount.

Customer:

Thank you for your excellent responses.

Robin D. :

You are most welcome

Robin D. :

You may wish to continue with the activity so reporting now is easier.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,210
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified
Robin D. and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Robin D. Your Own Question
Robin D.
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,210
16,210 Satisfied Customers
Experience: 15years with H & R Block. Divisional leader, Instructor

Robin D. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,338 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

16,210 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
If my sole propiertorship makes 50,000 net income. How much
If my sole propiertorship makes 50,000 net income. How much can I contribute to my solo 401k? Max Employee and employer contribution amounts?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
What are the forms for reporting Rental Income to the IRS on
What are the forms for reporting Rental Income to the IRS on foreign properties - we collect each month? Is this filed separately from our personal returns?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,061 satisfied customers
Whats the best tax software to file personal and business
Whats the best tax software to file personal and business taxes. we started our firm last year and we have very few clients we would like to pay per tax file because we have about 30 clients only.What… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
502 satisfied customers
Is there a form to file with the IRS for tax periods that
Is there a form to file with the IRS for tax periods that have ran past the statute of limitations from the date of assessment … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I failed to file a "Franchise Tax Report in Texas and
I failed to file a "Franchise Tax Report in Texas and received a Texas Notice of Forfeiture of Right to Transact Business". I went online to try and resolve this but it is extremely confusing as to wh… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
I over-reported income on 1040 in 2012. Will filing a 1040x,
I over-reported income on 1040 in 2012. Will filing a 1040x, adjusting off the over-reported income, trigger and audit?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
A retired person is receiving ss benefits. They sold an
a retired person is receiving ss benefits. They sold an investment property and now wish to place the proceeds into laddered CD's. this will generate interest income. is there a calculator that can fi… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Is income from an LLC passed through to personal tax return
Is income from an LLC passed through to personal tax return considered earned income, enabling me to contribute to a traditional IRA?… read more
abci168
abci168
Principal
27 satisfied customers
W, is there a amend tax return there at IRS there for me? My
Hi, my name is ***** ***** Miller, is there a amend tax return there at IRS there for me? … read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
63 satisfied customers
I haven't filed a personal return since 2011 tax year. In
Hello. I haven't filed a personal return since 2011 tax year. In 2013, I moved overseas, and didn't return till 2016. Can I just file my back taxes, or must I consult with tax attorney first for any i… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
EFLA question - net income from EFLA partnership was
EFLA question - net income from EFLA partnership was reported on Line K-1, Line 11 as $50,000 and is made up of interest, cap gains, section 988, expenses, etc. Of that amount, $30,000 is recharacteri… read more
Carter McBride
Carter McBride
LLM
233 satisfied customers
I am completing my personal income taxes. For this filing
I am completing my personal income taxes. For this filing year, I left my corporate career to manage my real estate full time. Therefore, the real estate is moving from a passive activity to an active… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Can I report rental income in my tax return on a property
Can I report rental income in my tax return on a property thar is owned by my father? He does not live in the US is not a US citizen and can sign a document to allow me to receive the rental… read more
Robin D.
Robin D.
Senior Tax Advisor 4
16,210 satisfied customers
0n sale of personal resonance. What is tax on sale. I
I understand that if you lived in the home for at least two years . there is no tax on the sale.true or not… read more
abci168
abci168
Principal
27 satisfied customers
Want to see on irs website the correct way to report
want to see on irs website the correct way to report personal items i sold that show on my 1099k … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,061 satisfied customers
I filed for an extension to file my 2017 income tax return.
I filed for an extension to file my 2017 income tax return. I recently suffered a stroke - 6 weeks ago - and have been unable to finalize my return. I should be able to file it within the next 30 days… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
I am trying to figure out the net income from the following
Hi. I am trying to figure out the net income from the following part-time jobs in MARYLAND and then the total net income. If possible, will you please send me how you arrived at the figures (the calcu… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
If person A sales a used car to person, is a sales tax
If person A sales a used car to person B, is a sales tax required to be paid by either party? … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,275 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x