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Old 01-28-2011, 05:25 PM
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Money Gifts and Earned Income

Are money gifts from friends and family taxable income and do they need to be reported on the tax return. Also is income from yard sale, swap meet, ebay and craigslist concidered earned income. If so how would I report it on the tax return.



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Old 01-28-2011, 10:50 PM
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" Are money gifts from friends and family taxable income and do they need to be reported on the tax return"---> No. THe donor(s) are responsible fo rgift taxes as long the donor gives over $1.13,000 million( as I assume that the donor has only onedonee). If the giver gave gifts to you in 2010 totalling more than $13,000 (other than to your spouse if you are married), then the giver must file Form 709.

" Also is income from yard sale, swap meet, ebay and craigslist concidered earned income. If so how would I report it on the tax return."--->Yes. Commisions and net earnings from self-employment are also considered to be earned income. long, short term cap gains and dividends are not considered to be earned incom. You have to report income from a garage sale on your taxes, however, not all garage sale income is necessarily taxable. you having sales cannot benefit from writing off any business expenses or losses unless it cost you upfront to list a classified ad in a local paper or create advertising for your sale.
As an indepednt contractor( selfemployed) , you get 1099-misc ferom your employer, I mean payer. then you should file Sch C and Sch SE. I fthe amount on Sch SE line 4 is $400 or exceeds $400, then you must pay SE taxes, selfemployment taxes. and you also generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.However, you do not have to pay estimated tax for the current year if you meet all three of the following conditions.If you had no tax liability for the prior year, You were a U.S. citizen or resident for the whole year , or Your prior tax year covered a 12 month period.If you sell a product or service online as a hobby. This income generally must be reported and deductible expenses are limited. The deductions cannot total more than the income reported and can only be taken if deductions are itemized on Form 1040, Schedule A, Itemized Deductions. In this case, though you get 1099-misc form for payments, you just report them on 1040 line 21 instaed of reporting them on Sch C.



For further info. on earned income, please visit the IRS website here; What is Earned Income?
Estimated Taxes
Self-Employment Tax (Social Security and Medicare Taxes)



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