Getting a Seller’s Permit
Generally, if you sell two items in one year, get a seller’s permit. Register on your state’s website. Collect tax if your business has a state presence. Otherwise, don’t.
Reporting Sales and Understanding Taxes
Used items sold at a loss owe no taxes. If sold for more than acquired, pay taxes on the profit. Earn over $600 from sales in 2023? File a tax return and report the income. Report online sales.
Capital Gains Taxes
- Capital gains taxes apply when investors sell items at a profit.
- Maximum 28% rate for art and coins.
- Sell used personal items for less than original cost, no income tax.
- Sell for more, pay capital gains taxes on the surplus.
Online Selling and Standard Deductions
- $20,000 and 200 sales threshold on platforms like eBay to get a form.
- Auction income may need reporting for income tax.
- Special organizations and foreign companies sell without value added tax.
- All California retail sales, unless exempt, owe sales tax.
- No sales tax for online sellers in states without internet sales tax: Alaska, Delaware.
- Single standard deduction in 2021 for under 65 is $12,550. Don’t file if under that income.
- Appreciated antiques and collectibles, owe taxes on profit.
Legal Approaches for Maximizing Profits
Learn legal approaches to maximize your profits. Retail or service owners report sales in business income. Personal items not intended for making a profit are generally tax-free.