Ebay and taxes

[gomp_69mike]

I consider myself a small time player in Ebay selling:
Can someone tell me what are some 'rule of thumb' ideas I should think about concerning taxes and reporting?
I sell (mostly) my hobby collections.  
Sell total for 2022 so far is $1579 with $556 in selling cost (35%). net sells of $931.
Sell totals for 2021 was $7330 with 2,029 selling cost (28%). net sells of $4969.
thanks for your helpful ideas.

[nobody*s_perfect]

The main rule of thumb is that if you are making a profit and doing adequate bookkeeping, then IRS considers you a business (rather than a hobby), which is a Good Thing because you can take those deductions for expenses.  You'd report this on a Schedule C attached to your 1040, so take a look at that form and its instructions to get an idea of how the IRS looks at it. You might be overlooking some deductible expenses.

Defining business vs hobby:  https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses 

[calntom]

Have a credit card designated for eBay business expenses only.

Don't know what tax bracket you are in but put back 25% for taxes.

[silverstatetreasureboxes]

@gomp_69mike 

Agree with poster @nobody*s_perfect , consider yourself a business so you can take off various deductions. When out sourcing,  I always write out a check so that I have the carbons. I keep a monthly book with envelopes clipped in and stick receipts,  supply costs, and when it's not feasible to write a check I list everything on a dated piece of paper.

     I don't deduct gas or mileage or office space, but that is just me.

[luckythewinner]

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@gomp_69mike wrote:

Can someone tell me what are some 'rule of thumb' ideas I should think about concerning taxes and reporting?
I sell (mostly) my hobby collections.  
Sell total for 2022 so far is $1579 with $556 in selling cost (35%). net sells of $931.
Sell totals for 2021 was $7330 with 2,029 selling cost (28%). net sells of $4969.
thanks for your helpful ideas.

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IRS Publication 334 (Tax Guide for Small Business) should be your bible.

Specifically read and understand the section titled "Treating inventory as non-incidental material or supplies". 

This essentially says that as a small business, you can use cash-based accounting and you do not have to  account for your unsold inventory on your tax return. All you do is expense the cost of an item in the year that it was sold. 

Here's what I do: 

When I buy something for resale, I put in on a shelf and attach the receipt to the item. When I sell an item, I staple that receipt to the shipping label receipt and put it into a box. 

At the end of the year, I empty that box, total up all those receipts, and that is my cost of goods sold for the year.