Do you sell on eBay or Craigslist? You better watch your back because the IRS is watching how much you make…
According to the Washington Post, sellers who sell more than $20,000 worth of goods and have more than 200 transactions will have to start reporting the information to the IRS on a new type of 1099 form called a 1099-K for 2011 tax season. And then you'll have to pay.
Those who sell infrequently won't have to worry.
One seller found out the hard way. Andrea Fabiana Orellana sold more than $41,000 in about 1,800 sales of designer clothes, shoes and accessories between 2004 and 2005. The IRS counted this as an income and said that she owed nearly $15,000 in taxes and penalties. Orellana appealed to the U.S. Tax Court and lost.
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