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Tax Questions...
good morning,
YES!!!
before anyone says anything, yes, i do understand this may not be the correct forum to ask tax questions and yes, my tax professional will answer these same questions. however, what i am looking for here is OPINIONS only and what choices all others make. that's it.
anyway, i went to print up my 1099-k and i was shocked i didn't receive one like i did last year. well, i wasn't aware that the thresholds reverted back to the 20k in sales level, and for a brief second i was extremely happy. a little background...i have never been a big seller (12k this year, most ever) and ALWAYS VIEWED ebay as a hobby, however, because i rec'd the 1099 last year, i saved receipts and kept much better records. i had never done that before as i never rec'd a 1099 before. so my tax professional filed me as a business, and i basically broke even ebay-wise.
so if my very BASIC understanding of ebay and taxes goes, you can treat sales as a hobby, but receive no benefits such as deductions for purchases, or treat as a business and get all of the deductions applicable. is this thinking somewhat correct? remember, i've only included ebay in my taxes once, last year only, so i have no point of reference.
so i guess my main question is, if i have as a general number of only 10k in sales, and do not currently receive a 1099, do you not even include ebay in tax preparation and treat as a hobby, or do you include ebay in your taxes and treat as a business? or is there something in between or that i am missing other than a few brain cells for even asking the question. i never included ebay in any taxes prior to last year, but i also never had anything close to 10k in sales either.
secondary question. does anyone have any idea how long the 20k 1099 threshold is supposed to last? i was really caught off-guard by not getting one this year, prompting me to ask these questions to start with.
thanks for any advice/opinions/insight.
gosimus
Mentor8 months ago@uwmgrad
< do not currently receive a 1099, do you not even include ebay in tax preparation . . ? >
Something to think about . . . just because eBay didn't send a 1099 to you, doesn't mean that eBay didn't send one to the government.
monroe67
Mentor8 months ago"Something to think about . . . just because eBay didn't send a 1099 to you, doesn't mean that eBay didn't send one to the government."
While I greatly respect and admire your general wisdom here on the Ask A Mentor eBay forum,
I believe you are mistaken with that statement.
Wouldn't that mean that the government (the IRS and/or state income tax authorities) would expect payment of income taxes on money that the income recipient knows nothing about?
I cannot imagine and I don't believe there is any current law or any provision of the Internal Revenue Code,
that allows a payor (e.g., eBay) to report payments that were made to a recipient (e.g., an eBay seller)
only to the Internal Revenue Service (and/or state) without a copy to the recipient.
Maybe down the road, under the current administration, but I don't believe any such law has ever existed in the United States of America.
gosimus
Mentor8 months agoHi @monroe67 Thanks for the compliment, you're not half bad yourself 😄
You're probably right, I hope so. It's just that I don't trust the government in general, and the IRS in particular. There are few things that I'd put past them when it comes to reaching into my pocket.
About the money "that the income recipient knows nothing about" . . . I find it difficult to conceive of receiving income, especially earned income, without knowing anything about it. Maybe the interest on a long-forgotten investment certificate?
eastlaneave
Mentor8 months ago@uwmgrad
1) The 20K threshold is permanent (until Congress changes it)
2) I suggest you file a Schedule C again. Just because you don't get a 1099-k doesn't mean your income shouldn't be reported.
Here are some tools for your tax return
A) This is a Financial overview page
https://www.ebay.com/sh/fin/reportslanding
(if the link doesn't work try
Seller Hub> Payments > Reports
Change your time period to "Custom"
Select: Jan 01, 2025-Dec 31, 2025
Right on the screen you will see the totals you need
- Sales
- Fees
- Shipping Labels
- Returns
B) Or you can generate a specific transactions report here:
https://www.ebay.com/sh/fin/report
Pick the parameters
- Select the Items you want in "Transaction Type"
- Select the time period: Jan 01, 2025-Dec 31, 2025
- Click Create Report
When notified, download the CSV file which will open in Excel.
You can create a formula to total the columns
C) You can find monthly reports here:
https://www.ebay.com/sh/fin/report/statement
and
https://www.ebay.com/sh/fin/report/invoices
-- Here is a help page where you can learn about it
https://www.ebay.com/help/selling/selling-tools/seller-hub-reports?id=4096#section5
uwmgrad
OP8 months agothanks...
from everything i've read thus far, just because you didn't receive the 1099, yes, it should be reported, otherwise audits might be triggered. operative word, might. i'm 63 and have never been audited. i'd like to keep it that way.
i do print off tax invoices each month and just today printed a 2025 payments/financial overview report which triggered my questions to start with after not receiving the 1099.
disneyshopper
Mentor8 months agoI have only received a 1099-K in only 2 years, and I've been selling on ebay for over 20 years. I use an Enrolled Agent to file my taxes. I don't claim any part of my home as a business, but I do have deductions for the warehouse space, utilities at the warehouse, mileage, shipping supplies, internet, shipping costs, etc.
uwmgrad
OP8 months agothanks,
I’m nowhere near your size. I have one large shelf, and that’s about it. That’s why I was looking for opinions about hobbies. Even just five years ago, I wasn’t ever doing this current “volumeâ€, so the question of taxes was never addressed.
golfingaddict
Mentor8 months agoI report all income, I don't fear an audit. I've always filed my taxes on all income from eBay and other online sources.
In particular, I would recommend that anyone that received a 1099-K last year and then suddenly have "no business income" be very cautious about just ignoring income because they stayed under the 20K mark.
Banking laws, cash deposit rules and bank transfers are being looked at more and more. It would be easier to claim the income than to have to explain "missing income" down the road.