Ideas on Simplifying Federal Taxes for 2025

Question

This question is for hobbyists that receive a 1099-K form from Ebay, are not acquiring inventory for resale, are not concerned about selling for a loss, and do their own Federal taxes. Last year I took the approach of deducting expenses like a business would. Those expenses included all Ebay shipping labels and office supplies (cardboard boxes, tape, labels, etc). The approach of deducting expenses involved Schedule C ( Profit or Loss From Business), Schedule SE (Self-Employment Tax) and Schedul...

stainlessenginecovers · Accepted Answer

My opinion is this: The reason that 'hobbyists' are not allowed deductions is because someone can EASILY say (as example) they 'go to a different restaurant for Bkfst, Lunch, Dinner as a 'hobby' and then 'write off' mileage, the meal cost itself' etc etc. Then came 'online' selling for the average schmo. So, when you 'collected' those 'things' as a 'hobby' but then decided to 'sell off' your 'hobby'- you are now changing yourself to a 'seller' ie. a 'business' as each seller to buyer transaction...

12345jamesstamps · Answer

Working with H and R Block every year I can do deductions which helps with form 1099k.

I deduct my wifi monthly payments...12 for the year.

I am also allowed to deduct 50% of my telephone monthly payments...12 for a year...because I have eBay APP on my phone and do use it.

Deductions can include a camera, computer, etc anything purchased within the year filing with dealing with selling on eBay.

I prefer not to do my own taxes for I might make a mistakes or forget to add some deductions.

Just thought I throw this out here for those with the upcoming 2026 taxes.

ryry-jj · Answer

It is expensive to file as a hobbyist, you lose many deduction. Regardless of how you classify yourself, file this as business. And, as always, consult with a tax professional, everyone is different

deltilogical · Answer

Maybe we need to overturn the 16th Amendment. Idiots would probably replace it, with a VAT...nevermind...

toysaver · Answer

For me the SE form is one of the most important because I want that SS income to grow.

pgh_pen · Answer

The IRS has long ago figured out when people put self-employment income on the wrong line on a tax return (to avoid Schedule C, and thus avoid self-employment tax).

Side note: Self employment income upon which you pay SE taxes will count as quarters of work towards the required 40 quarters.

lacemaker3 · Answer

@3.75ips wrote:
This question is for hobbyists that receive a 1099-K form from Ebay, are not acquiring inventory for resale, are not concerned about selling for a loss, and do their own Federal taxes.

Last year I took the approach of deducting expenses like a business would. Those expenses included all Ebay shipping labels and office supplies (cardboard boxes, tape, labels, etc).

The approach of deducting expenses involved Schedule C ( Profit or Loss From Business), Schedule SE (Self-Employment Tax) and Schedule 2 (Additional Taxes).

This year I'm planning on including the gross amount from the 1099-K (which includes shipping paid by buyers) on Schedule 1 (Additional Income and Adjustments to Income) Line 8z (other income) and Form 1040 Line 8 (Additional Income). I would not deduct any expenses and eliminate Schedules C, SE and 2.

As a hobbyist do you complete forms C, SE and 2?

I don't think it is EVER a good idea to file taxes as a "hobbyist" because hobby sellers are not allowed any deductions at all. Hobby deductions used to be part of the "Other deductions" on the Itemized Deductions schedule A, but almost all "Other deductions" were eliminated as part of the Tax Cuts and Jobs act during the current president's first term.

Filing as a business will get you the most favorable tax treatment for the income, meaning the most deductions. It's not very much work, especially if you are using tax software. But if you're not willing to keep the necessary records, then there are other options without completely giving up and filing as a hobbyist.

Click the link below for more detailed information:

https://www.irs.gov/businesses/what-to-do-with-form-1099-k#use
Personal items sold at a loss
A loss on the sale of a personal item can't be deducted from your taxes. But you can zero out the reported gross income so you don't pay taxes on it.
If you sold items at a loss, which means you sold the items for less than you paid, there is no tax liability. You have 2 options to report the loss:
Report the payment on your tax return at the top of Schedule 1 (Form 1040) PDF. This will ensure you donâ€™t pay taxes you don't owe; or
Report the loss on Form 8949, Sales and Other Dispositions of Capital Assets, which carries to Schedule D, Capital Gains and Losses.

chapeau-noir · Answer

Not a hobbyist but only part-time now, and selling a lot of stuff just out of the house. Schedule C is like 4th grade math and I like deductions, so I continue to use schedule C.

3.75ips · Answer

I'd also recommend getting an account with irs.gov for other helpful information. The Information return documents page does not show my 2024 1099-K form from Ebay yet. Perhaps others can view theirs.

johnrj1226 · Answer

Always did that when I was selling on line whether I received a 1099K or not. Should a person get audited by the IRS of state Revenue authority they can request and get all the gross income your received income you receive below the 1099K threshold - that would not be a good thing. Always better to be safe than sorry...