Taxable Income from Online Sales
Many people mistakenly believe that their income from selling items through an online platform, such as Amazon or eBay, is not taxable and does not have to be reported to the IRS if their sales are below the platform’s Form 1099 reporting threshold. This belief is incorrect.
Section 61(a) of the Internal Revenue Code provides that gross (taxable) income includes “all income from whatever source derived.” Sources of income include (but are not limited to): Compensation for services, gross income derived from business, gains derived from dealings in property, interest, rents, royalties, dividends, annuities, income from life insurance and endowment contracts, pensions, income from discharge of indebtedness, distributive share of partnership gross income, income in respect of a decedent and income from an interest in an estate or trust.
Regardless of whether an online platform, such as Amazon or eBay, was required to issue a Form 1099-K, the income the taxpayer received is taxable – you still need to report and pay taxes on the income even if you do not receive a Form 1099.
Please contact the experienced attorneys at Bruning & Associates, P.C. at 815-455-3000 to schedule your complimentary consultation to discuss your questions about taxable income.
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