Quote:
Originally Posted by jtschantz
I hear people complain all the time about buyers premiums (12-19%), ebay and paypal fees (10%+), but I have seldom heard anyone mention that they are taking a 20-30% tax hit on everything they sell. Why not?
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Because your statement is not accurate. If you are running a proper business you pay
income taxes on net income (after expenses), not on gross sales. Roughly speaking, if a card costs you $100 and you sell it for $110 your taxable income from that sale is $10, not $110. BP, Paypal and Ebay fees are charged against the gross, regardless of the net profit or loss on the item. A 10% hit on a $110 sale is $11, leaving you at a net loss of a buck for the sale if the item cost you $100. A 30% income tax on $10 is $3, leaving you at a profit of $7 on that $110 sale. That's why the sales costs hurt so much more than the taxes.
Like I've always said, I wish I was paying a million dollars a year in
income taxes.