@redthesilent wrote:
This will be my first time I receive a 1099K form this year since a Draft Listing (not posted yet) will be around $6,500-$7,000 in sales. I know I'll make a profit considering what I paid for all, which I plan to sell as a lot.
I'm also selling as a side business with no business license as I'm not going to list many items so I see no need for a business license. I know nothing of tax law or have any experience like most sellers on eBay and experience is the best teacher they say.
My question is that I KNOW I can't deduct expenses like shipping since I'm not a business, but can I save on taxes instead of paying the whole sale amount?
For example: I bought a Lugia V Alt Art PSA 10 (Silver Tempest/English) for about $450 (I have receipts of everything I'm selling/printed out all the things I bought) and it's now around $650-$750. Instead of paying the WHOLE $650-$750, can I pay the difference between the amount I paid for it and the total of what it sales? ($200 if sold for $650; $300 if sold for $750). or do I pay the whole amount since I'm not a business?
If anyone has answers through their own experience, your help would be greatly appreciated, thanks :)!
@redthesilent:
You say you're not a business, and yet you admit you have a "side business" here. That's a business.
I looked at your feedback. Last year alone you had a few thousand dollars in sales for profit. Guess what? You're operating like a business already and that should be reported for 2024 and maybe in earlier years as well. Being a business is to your tax benefit, and you don't need a business license for Federal taxes or to sell on eBay. So don't overthink this - it's not rocket science.
You also don't need to be a "business" to deduct generous expenses like your cost of the items you already have receipts for, mileage, supplies, shipping costs, etc. It's a simple task of getting the available reports from eBay, totaling up all your other expenses, filing a yearly Federal Schedule C with gross income less those generous expenses, and getting to a lower net profit. That net profit you will add to any other non-eBay income to figure your tax on your return. The simple math is not that difficult, or turn the numbers over to your tax person if you need one.
It's about time you started doing it like the rest of us. You're among the many thousands, if not millions, of sellers who are now waking up to the need to come clean and start reporting what you've possibly been getting away with in years past by not reporting ANY income you're received from ANY sales or "side business" as you define it. We online sellers, who have been properly reporting ANY income for years even without a 1099-K, are quite happy that the playing field is now being leveled. Now it's your turn to get your feet wet and jump in as well.
If you're really as confused as your post appears to show, get in touch with a tax professional and learn the basics of what you need to be doing. It should have been what you were doing all along.
Good Luck!
Cheers, Duffy
mam98031 • Volunteer Community Member • Buyer/Seller since 1999
