eBay

jthole · ‎02-19-2024

How much can I sell per year without adding it to my income taxes?

I live in Minnesota, if that matters.

monroe67 · ‎02-19-2024

OP's title: "How much can I sell without adding it to my income taxes?"

So far, dnasilver has, in my opinion, posted the most accurate answer:
"Without knowing what other income you have no one [here] can give you a real answer."

It is unlikely that anybody on this forum knows who you, "jthole", really are, in real life, whether in Minnesota or Hawaii. I think you might look a little like Charlie Brown, but that's just a guess. We don't know you and we know even less about you.

Nobody here knows how many dependent children you can deduct on your federal tax return.

Nobody here knows how many of those dependent children are wearing expensive corrective dental braces.
Nobody here knows how much regular pay you get from your regular day-job or any other source of income.
Nobody here knows how much money you might have inherited from Great Aunt Gladys last year.
Nobody here knows how much passive income you receive from rents on the apartments you might own in New York City.

Conversely, nobody here knows if you are a retired person whose income, other than Social Security and/or pensions, is still low enough that the IRS does not require you to file annual income tax returns. (I have heard one of my neighbors talking about being in that situation.)

12345jamesstamps · ‎02-19-2024

To put it in simple terms...after $600. made...you will get a 1099K form to add to pay taxes on that at end of year from whoever or wherever you made the money or got the money.

Ideally, any money made you should pay taxes on it...but the 1099K makes sure you pay for the amount because the IRS gets a copy of the 1099K...so they know.

But there are deductions you can use to even it out...so don't worry.

Save all receipts.

We wish everyone paid taxes from making money off of selling stuff....but I am not really sure how the IRS knows you made money without getting a 1099k form from someone. I wish someone here would enlighten me on that subject.

Filing taxes with some 1099k's will of course cost you more to file if you go to H and R Block or somebody like that. 1099k's and W2's do increase that cost of filing with someone like that(H&R Block). I asked when I filed taxes last week. LOL Best to have just one W2 and no 1099K. Kinda hard in these times of course.

reallynicestamps · ‎02-19-2024

You pay taxes based on your total income after expenses*

Depending on your total income you pay taxes in several brackets.

If you are single and earn over $11K but less than $48K you are paying 12% income taxes.

But if you have a really good year on eBay and earn another $15K, you will pay 15% but only on that $15K!

And so on as you move from one bracket to the next.

The lowest bracket is 10%. The first $10K of your income is charged at 10%.

The highest is 37% but you only pay that on the part of your income that is over $609K.

I'm rounding here.

There are seven levels each charged a slightly higher percentage than the level before.

https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets#2024-tax-brackets

And that's only on your income after deductions.

I once worked out that if I earn less than $17K annually ( about $8 an hour) I would not be paying any income tax at all because of my standard deductions.

*Expenses are things like eBay fees, packaging, insurance.

dbfolks166mt · ‎02-19-2024

total is not based on sold prices but Ebay also adds in the shipping cost and taxes paid by the buyer. This makes the amount look great to the stockholders but sellers realize the amount is fake.

The taxes are NOT included as part of the sellers revenue nor is it reflected in the 1099-K.

dbfolks166mt · ‎02-19-2024

There are multiple answers to your question. First anything above $0 should be reported on your income taxes. Secondly if you sell over $600 you will receive a 1099-K from eBay. Others have already explained what eBay factors into the 1099. Note if you are selling on other venues or forums and are being paid through a financial processor like PayPal or Venmo you will also receive 1099-K's from those financial processors once you eclipse the $600 threshold.

As to how that impacts how much you have to actually pay in additional taxes others have already pointed out that depends on multiple factors.

nobody*s_perfect · ‎02-20-2024

@dbfolks166mt wrote: ... if you sell over $600 you will receive a 1099-K from eBay. ...

The IRS has stated that it plans to set a threshold of $5000 for 2024, but that has not been finalized. The threshold for 2022 ($20K) was announced in December 2022, and the threshold for 2023 (still $20K) was announced in November 2023, so IMHO there's no point in speculating now. The threshold for 2024 could turn out to be $600, but we don't know yet.

jthole · ‎02-20-2024

What is the sales threshold for ebay to mail out the 1099-k form? In Florida, where my brother lives, he receieves a form 1099-k from ebay if or when his sales go over 20K. But what is the sales threshold for my state, Minnesota? I have been unable to find the information online.

jthole · ‎02-20-2024

I have sold more than $600 on ebay during 2023. But I have not receieved a form 1099-K from ebay. Do they usually mail it out? I do not see it in my seller's account.

monica-sells · ‎02-20-2024

A 1099-K is issued by the payment entity based on the following thresholds (2023 tax year)

Arkansas	> $2,500 and > 0 transactions
D.C.	> $600 and > 0 transactions
Illinois	> $1,000 and > 3 transactions
Maryland	> $600 and > 0 transactions
Massachusetts	> $600 and > 0 transactions
Montana	> $600 and > 0 transactions
New Jersey	> $1,000 and > 0 transactions
Vermont	> $600 and > 0 transactions
Virginia	> $600 and > 0 transactions
All other states follow the IRS threshold	> $20,000 and > 200 transactions

luckythewinner · ‎02-20-2024

@jthole wrote:
How much can I sell per year without adding it to my income taxes?

The IRS and States have a minimum a threshold for whether eBay has to use a 1099-K to report payments you have received.

But that is a threshold for whether eBay has to report payments made to you, not whether you have to report income. As far as I know, the IRS does not have any minimum threshold for reporting income.

dbfolks166mt · ‎02-20-2024

The IRS has stated that it plans to set a threshold of $5000 for 2024, but that has not been finalized. The threshold for 2022 ($20K) was announced in December 2022, and the threshold for 2023 (still $20K) was announced in November 2023, so IMHO there's no point in speculating now. The threshold for 2024 could turn out to be $600, but we don't know yet.

OP is in Minnesota which has a state law reporting threshold of $600 so what the federal limit is currently at or what it will be in 2024 is irrelevant unless Minnesota changes it's current law. No speculation it's just the current status.

nobody*s_perfect · ‎02-20-2024

Interesting. Minnesota doesn't appear on the lists in any of my links to states with thresholds lower than the federal level. Do you have a link?

reallynicestamps · ‎02-20-2024

@jthole

But what is the sales threshold for my state, Minnesota?

Phone the office of your federal congressman.

You don't need the actual representative, if they are at all competent, the staff should have that information available for you, or be able to get it quickly.

That's what representative means.

I'm basing this advice on my years in the Office of Canadian cabinet ministers. When we got a query through a Member of Parliament, we jumped to answer it.

And a competent representative hires a representative staff.

But as lucky says:

But that is a threshold for whether eBay has to report payments made to you, not whether you have to report income. As far as I know, the IRS does not have any minimum threshold for reporting income.