How Much Can I Sell Before Paying Tax?

by

Taxation Rules for Selling Personal Items

  • No tax when selling personal used items for less than the original cost.
  • Pay tax on the profit if the items are sold for more than acquired.

Reporting and Taxation Thresholds

  • Ebay and similar sellers receive a 1099-K reporting form above $600 in sales starting in 2023 (formerly $20,000 and 200 transactions).
  • Sell your home and be exempt from capital gains tax on the first $250,000 profit if single, $500,000 if married filing jointly (once every two years).

Taxation Policies for Online Sales

  • UK sellers pay tax on online income over £1,000.
  • VAT applies for EU sellers on the hammer price.

General Guidelines and Regulations

  • If your business has a presence in a state, collect sales tax; otherwise, do not.
  • Used items sold at a loss incur no taxes, but profits on sales above acquisition cost are taxable.
  • Earn over $400 from sales? File a return.
  • There are five US states with no sales tax: New Hampshire, Oregon, Montana, Alaska, and Delaware.

Income Tax Considerations

  • 2021 single standard deduction for individuals under 65 is $12,550; no filing required under that income threshold.
  • Appreciated collectibles are subject to taxes on profits when sold.

Additional Points

  • Report online sales to the IRS.
  • Capital gains taxes apply when selling items for a profit.
  • Special organizations and foreign companies can sell without value-added tax.

Leave a Comment