$20,000 and 200 items

[Workzone]

So, My question is:  Those who do less than $20,000 or less than 200 items will not be reported to the IRS, not taxed.  Kind of a freebie so to say.  If I go over both limits and taxed on say $25,000, am I taxed on the whole $25,000 or $5,000..Do I have the freebie benefit of $20,000?

[bob2085]

There is no “freebie” as you have to pay tax on all the money you make.

The 20k and 200 is the point where paypal has to report it to the IRS but even if you only to 1k in sales and 50 transactions paypal does not have to report it but you do.

Now the part that is taxable is the amount of money you have left after deductions.

I have my on line business in half my home I deduct half my mortgage half of my power bill and then the standard stuff like ebay fees, paypal fees, the amount I pay for shipping, mileage to and from the shipping center to drop off the packages, and mileage for going to pick up items when I have to, the cost I paid for the items and more.

As long as you deduct every thing that you legally can you may pay no taxes at all.