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confused regarding tax year 2022 and a 1099-K I received early 2022--do I ignore it or report?
Good morning.
Throughout the last few years I dabbled in selling off my sports cards here on Ebay. I made $2,900 in sales in 2022. I received a 1099-K from ebay some time ago. I understand the feds reverted back to the earlier thresholds of $20k or 200+ transactions for reporting but since I still received the 1099-k what do I do?
I live in MA and they do have a $600 threshold. I am not self employed and this dabbling on Ebay was NOT any sort of business, just something I did to sell off my collection for cash. I can't seem to find proper guidance here. Can someone please help me? thanks
5 comments
mega-ma-roo
·3 years ago@jarodvitorino , You said your sales were from selling your sports cards. Did you sell any of those cards for more than you paid for them? If you did, you should seriously consider filing as a sole-proprietor business and report your receipts and expenses on Schedule C.
@wooden_flower recommended this site and you really should read it:
Understanding Your Form 1099-K | Internal Revenue Service (irs.gov)
I recommend filing as a business because if you do not and if you made a profit on ANY card, it must be reported on Schedule D and taxed accordingly. Also, in that case, you CANNOT offset any profit by losses on other items. If you file as a business, you can deduct your expenses and your losses will offset your gains which may result in a lower tax bill. You should calculate your tax burden both ways and use the one more beneficial for your situation.
From the IRS site:
Mix of personal items sold – some at a gain and others with a loss
Your gains and losses are to be reported separately and gains for assets cannot be offset by losses from the sale of personal assets.
If you sold an item you owned for personal use at a gain, see Personal items sold at a gain for information on how to report.
For personal items sold at a loss, follow the instructions for Personal items sold at a loss for information on how to report.
disneyshopper
Mentor3 years agoSince MA has a $600 threshold for receiving a 1099-K form, then you do need to report your sales on Schedule C. You can deduct your costs for those sales: boxes/bubble mailers/polymailers, labels, shipping costs, mileage, etc. Regardless of how much in sales you made on ebay, all sellers should have been reporting these sales to the IRS.
jarodvitorino
OP3 years agoTy Disney---but Do I report that only in my MA refund area then?
wooden_flower
Mentor3 years agoThe 1099k went to the IRS, so you have to put it on your federal return. You should use federal schedule 1 - you do not have to schedule C since you are not a business.
wooden_flower
Mentor3 years agoNever ignore a tax document.
Only business sellers need to use schedule C, but you do need to determine if you made a profit selling from your collection.
"If you receive a Form 1099-K for a personal item sold at a loss, report the information on Form 1040, Schedule 1, Additional Income and Adjustments to Income with offsetting transactions. For example, if you receive a Form 1099-K for selling your couch online for $700 you will report:
The net effect of these two adjustments on adjusted gross income would be $0."
https://www.irs.gov/businesses/understanding-your-form-1099-k