IIRC - it's $600 profit on a sale of an item or items, not just a flat $600.
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IIRC - it's $600 profit on a sale of an item or items, not just a flat $600.
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Here's what Ebay has to say. It sounds like it may be a new thing. I can see this for Ebay sellers that are indeed businesses. Some sellers have 1000+ transactions; those are not garage salers. The limit does seem low though, maybe they missed one zero. $6000/yr would be more reasonable.
https://www.ebay.com/sellercenter/pa...nd-your-1099-k
Here’s what you need to know
Starting on Jan 1, 2022, eBay and other marketplaces are required by the IRS to issue a Form 1099-K for all sellers who receive $600 or more in sales.
The new tax reporting requirement will impact your 2022 sales and taxes that you file in 2023—it will not apply to your 2021 sales and taxes that you file in 2022. Throughout 2022, look for updates from us that will help explain what’s changed and what you need to do next.
If you haven’t already given us your Social Security number (SSN) or Individual Tax Identification Number (ITIN), we’ll ask you to provide it once you reach $600 in sales.
No need to worry— you only pay taxes on profits. You won’t owe any taxes on something you sell for less than what you paid for it. For example, if you bought a bike for $1,000 last year and then sold it on eBay today for $700, that $700 you made would generally not be subject to income tax.
While eBay is unable to give tax advice to our sellers, we want to help make dealing with taxes as easy as possible. Our goal is to help all sellers, casual or those selling as a business, with these new requirements.
[OP]
Contributor
I'm afraid that's not correct, Rich. There's no way for eBay or Amazon to know what your profit is. The test is simply that you received over $600 on a platform - total of all sales on that platform.Originally Posted by Rich Engelhardt
If eBay (or PayPal, or Amazon or Etsy, etc.) sent you more than $600 in a year, you will receive a 1099 from them. When you file your taxes, you deduct your cost of the items sold, and the remaining amount (if positive) is taxed.
Mike
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There are detailed instructions on filing your income tax return to report 1099-K receipts and associated expenses. The instructions I located were for TurboTax, when the transaction is personal, not business related, but the gist of it would work for any prep software, You will need way to provide an initial cost for each item sold.
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Your right I was paying out to subcontractors and had to send them a 1099 and had to file other forms also
Friend of the Creek
OK, Lee
You officially made me laugh out loud today. Thanks!
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Tom
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Do you have a link to this? The IRS information on the form 1099-K says nothing about personal sales. It assumes all business transactions.
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I can't get the link to work, but here's a copy/paste of the instructions.
This can be reported as the sale of items not associated with a business so this won't be considered as self-employment income.
For reporting Form 1009-K for personal items sold not associated with a trade or business, you can report this as Miscellaneous income.
- From the left menu, go to Federal and select the first tab, Wages & Income
- Add more income by scrolling down to the last option, Less Common Income, and Show more
- Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C, and Start
- Choose the last option, Other reportable income and Start and Yes
- Enter the applicable description and amount and Continue
- First, enter Form 1099-K as received. It is essential that the full amount be entered.
- Next, enter an adjustment as a negative number to reflect the cost of these items and the sales expenses (but not more than the sales price. You can't produce a loss.)
Last edited by Lisa Starr; 06-08-2022 at 1:51 PM. Reason: Typo correction
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I used to sell a little stuff on ebay. I would add sales tax onto the price if the buyer was in California. I just pocketed the extra money. i had no idea how to pay it to the state anyway. Not that I was making enough to report it.
If you used the item for business did you depreciate the cost already? If you have a stack of lumber seasoning, does it get depreciated if it not out in the weather?
Bill D
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Pretty much the only way to make money woodworking, innit?
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