eBay sellers- suddenly reporting to IRS???

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Jun 9, 2005
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Vermont
I’ve been selling on eBay for a long time. This year, for the first time, I received an IRS form 1099K in the mail.



I’m a person who sells things that are excess to my needs, basically using eBay instead of frequent yard sales and to reach a larger collector audience on some items.



I do not have any form of incorporated business or partnership. My full time job has no connection to my eBay sales.



Yet using the online tax site that I prefer, it seems to be steering me into a series of questions and requesting information that would only pertain to someone running a full-scale business. For example, vehicle specifications and mileage reimbursement calculators, etc.



Is there a way to simply— yet honestly— report this information? Is it something I need to include in my taxes at all, since I don’t make much money and consider it a substitute for a yard sale? I’ve never heard of reporting eBay sales before now so I’m a bit confused.
 

dishdude

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Nov 14, 2008
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Great topic! I'm about to do the taxes so you reminded me to check on this. Like you, I sell extra stuff around the house I don't need any longer, everything I sell is at a loss - I'd rather sell something that could be useful to someone else than toss it in the trash. It looks like this won't impact me this year, but it certainly will next year.

Screenshot 2022-04-02 132041.jpg
 
Joined
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You don't need to be incorporated to be running a small business. In Canada you would report your business income (sales) and your business expenses, and pay taxes on the difference.

There are certain advantages to running a small business. Expenses can include all of your reasonable costs. You don't even necessarily have to make a profit (you can also report a business loss - with its related tax advantages), though there must be a reasonable expectation of an eventual profit. I think the rule of thumb is a profit within 3 years.

If you have over $20,000 in business income (sales), in my humble opinion, you are running a small business.
 
Joined
Mar 23, 2003
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Hopewell, Virginia, USA
The problem was that some people were running businesses on sites like eBay and not reporting profits or gains. It was similar to servers not reporting tips in the 1980s, which led to rules changes. This stuff affects the rest of us. Now everyone selling on eBay more than $600 per year gets their sales reported.
 
Joined
Jul 26, 2020
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Use Craigslist. If you run more than $600 a year through PayPal now it gets reported to the IRS. Thanks ESJ

Yep, even cash transfer apps like Zelle.

Coinbase is reporting gains to IRS.
 
Joined
Mar 20, 2008
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USA
This type of income has always been taxable. The tax rules themselves have not changed in regards to these kinds of sales. The only change is the reporting requirement on ebay's part.

You do not need any kind of incorporated business or partnership or even an EIN. Many people in business for themselves (sole proprietorships) with no EIN or even a business name. For the stuff that doesn't apply, just put zero. Since you don't drive as part of ebay selling, you have 0 miles to reimburse.

The total money you made minus the cost you paid for the items and ebay/paypal fees.
 
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Nov 29, 2021
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I sell sometimes, but nowhere near $600.

I've been thinking of becoming a seller on Amazon...
 
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Jul 1, 2013
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Ottumwa, Iowa
Chances are it wont affect your taxes. This falls into the territory of needing a tax man. They would be able to handle it no problem.

To show a loss on it you would have to document it as an asset and show depreciation on it.
 
Joined
Mar 20, 2008
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USA
Exactly, this is my problem with getting a 1099 for selling something at a loss! I should be getting a tax deduction not a tax bill!

ebay doesn't know that, though :unsure:

However, you can deduct what you paid for it, so if you lost money, you would not have to pay tax on it.
 
Joined
Jun 15, 2003
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ME
I'm not a tax expert but you might have the opportunity to write off the portion of your home office used for ebay-ing.

The flipside of this is crooked local municipalities stepping in and demanding "business permits", stopping free trash pickup, etc.

eBay is, for what it is, a bigger audience than your local craigslist/ yard sale. It is, at times, worth the 11% you give them plus whatever the tax man will take.

Got a Diana camera for $1 at a yard sale, sold it for $60 on ebay. Still happy with my take.
 
Joined
Aug 5, 2002
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21,263
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Silicon Valley
Just because you sell something doesn't mean you make profit on it. If you keep track of your cost of the new item you bought when you sold it used, chances are you lose money, maybe you can even use the loss to deduct your income and pay less tax too.

Taxation is theft
So is toll road, quotas, ban on this and that, traffic laws, fees, commissions, etc. We live in a society that there'll be tax and there'll be services. We do have the freedom to move and find what works for us. Freedom is good.

I decided long ago that dividend stocks is not a good deal for me, I now only buy stocks that appreciate and I sell them only as needed. No selling means no gain which means nothing to tax on.
 

CKN

Joined
Oct 14, 2014
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Utah
I'm not a tax expert but you might have the opportunity to write off the portion of your home office used for ebay-ing.

The flipside of this is crooked local municipalities stepping in and demanding "business permits", stopping free trash pickup, etc.

eBay is, for what it is, a bigger audience than your local craigslist/ yard sale. It is, at times, worth the 11% you give them plus whatever the tax man will take.

Got a Diana camera for $1 at a yard sale, sold it for $60 on ebay. Still happy with my take.
Yes-one of the biggest reasons for an IRS audit. I would suggest anyone doing this weigh the potential tax savings against the hassle of an audit.
 
Joined
Oct 28, 2002
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Everson WA - Pacific NW USA
The rules for home office for hobby type business are even more stringent than ever IMHO.

Serious business going to keep good records for CGS. This will or should be the largest write down naturally.
 
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