My first time to receive a 1099 from Ebay and I have a (probably dumb) Schedule C deduction question

[bluebonnet_audio]

Howdy all,

I was mainly a hobby seller until this past year, previously well under taxable until now.   My question is this, when I do a payment report summary for last year, it shows orders as the number that matches my 1099K and a significant number under returns as a negative, and another for expenses.  I would assume I can deduct refunds and expenses?  

One last number, I don understand is "net transfers".  I am completely unclear on this number.  

Any direction would be greatly appreciated.  

[wooden_flower · Accepted solution]

@bluebonnet_audio 

Yes, your fees and returns are deductions you make to get to your net income. It is your net income that is taxable.

The cost of the items you sold is also a deduction.

You should use schedule C with your tax return - the IRS has a guide to schedule C that will help you.

Net transfers is the amount of your payouts.

[bluebonnet_audio]

Thanks so much for your response!  It does make sense of course.  I just wanted to be sure, as this was my first year to report this.  

Very much appreciated!