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1099K - Deductions for "Hobby Sellers"
Late to the game, I know. I’m a hobby seller, reselling collectables. I am not licensed or registered as a business. It looks like hobby sellers cannot deduct selling expenses (original cost of product, shipping materials, fees, etc.). Is that the case? I recently dumped my inventory and stopped selling on eBay due to the tax liability (I have gone way over the $600 limit for the year).
2 comments
dryophelia
Mentor2 years ago@arizona_heat
Here is what the IRS has posted about hobby selling.
https://www.irs.gov/newsroom/heres-what-taxpayers-need-to-know-about-paying-taxes-on-their-hobby-activities
inceptions
Mentor2 years agoIt doesn't matter whether you consider yourself a "hobby seller" or a business, you still have to declare your sales on your tax return (and yes, you can deduct selling expenses). The $600 threshold is only for receiving a 1099-K. That has nothing to do with your obligation to report your sales of ANY amount below or above.
You should check with your city/county to find out if you are required to have a business license. Most likely you are required to have one.
Since you were not aware or misunderstood these requirements, I would recommend making an appointment with a tax preparer to find out what you need to know so you can have everything ready to file your return for 2023.