eBay

baird54 · ‎04-12-2022

Not sure where else to turn on this one, so I thought I'd just put up a message and see if anyone had any suggestions.

I am currently trying to re-certify my Income-Driven Repayment plan for my student loans with Navient. I am currently unemployed, and so do not have any income from wages/salary, but I have eclipsed the income threshold and so I do have reportable income. They are telling me that they need proof of whatever income I've made from selling on eBay for 2022. I initially tried uploading monthly summaries of my sales to them, but they told me that was not good enough and that they needed something which would give them a Gross Income number. I guess the best thing I could send them would be a 1099-K, but I won't get that for another 8-9 months and I assume there's no way to get some kind of early year-to-date version of it. I got a transaction report from eBay listing all the individual sales, but the gross income still isn't listed - just selling price and shipping listed individually and no totals anywhere.

I was just curious if anyone had any ideas of what I could provide to them that might suffice as documented proof of my Gross Income. Any help would be greatly appreciated. Thanks in advance!

dnasilver · ‎04-13-2022

Well if you take the selling price of the items sold and add them up or do a "sum" statement on Excel that would give your Gross for your eBay sales. Not sure why you are confused. Have no idea what Navient wants from you but if you are selling on eBay how can you be unemployed?

ten_o_nine · ‎04-13-2022

How often do you re-certify? Can't you send one from 2021?

How about a bank statement showing ebay's deposits into your account?

evry1nositswindy · ‎04-13-2022

Go to seller hub > payments > payouts. That gives total amounts deposited to your account.

evry1nositswindy • seller since 2013
Volunteer Community Mentor

soh.maryl · ‎04-13-2022

I could be wrong about this, but it seems like to be employed, you'd need to have an employer.

eBay is NOT the seller's employer, just like the antique mall where I have my stall set up is NOT my employer.

lacemaker3 · ‎04-13-2022

@dnasilver wrote:

... Have no idea what Navient wants from you but if you are selling on eBay how can you be unemployed?

Since @baird54 is selling on eBay, he would be considered self-employed, not unemployed. You're right about that.

@baird54, you should find out from Navient what evidence they need since you are self-employed. They should have some protocol in place for this situation.

It looks like all of your 32 selling feedbacks have been received within the last 6 months, and only 7 of them were more than 3 months ago, so you may not have had enough income last year to receive a 1099-K.

baird54 · ‎04-13-2022

I was completely unaware of the self-employed issue. Not sure how I missed that. I will definitely get back in touch with Navient about that. I remember them asking me if I was self-employed and I said no, but it looks like I was pretty wrong about that. I imagine I'll probably need to re-apply for my IDR with them.

I definitely did not sell enough in 2021 to meet the threshold, but I know that I already have for 2022 since they notified me of that earlier. I was just reading up on the quarterly taxes, and I read that I would only need to file quarterly taxes if I expect to owe more than $1,000 in taxes for the year. Is that accurate? I have no expectation of selling enough this year to owe that, so I guess I'm just trying to figure out if I don't need to worry about that or if I need to pay something in the next day or so.

I guess it's good that I'm becoming less ignorant about all this now. I never did intend to sell on eBay as any kind of long-term thing - I mostly just did it 'cause I had extra cards that I could sell to make a little cash while I'm looking for full-time work. Thanks to everyone who has replied so far. My apologies if I seem to not know what I'm doing/talking about - I guess I didn't realize just how much more there was to this.

luckythewinner · ‎04-14-2022

@baird54 wrote:
I was just curious if anyone had any ideas of what I could provide to them that might suffice as documented proof of my Gross Income. Any help would be greatly appreciated. Thanks in advance!

Have you asked Navient what they will accept? I'm sure you are not the only eBay seller with student loans.

Perhaps they would they accept a copy of your your tax return - that would show your gross income.

baird54 · ‎04-15-2022

I have not yet filed a tax return for 2021, mostly because I honestly did not think I would need to as I did not believe I earned enough income last year to need to do so (by my calculations, I only took in about $1,200 total between eBay sales and payments received through Paypal). At this point, I honestly don't even know where to start. I very much want to file at this point, but I have no income documentation readily available to do so. Thankfully I have a few extra days to figure all this out since the deadline's not until Monday, but I'm not sure what good it does for me to just put numbers on a tax form without attaching documentation. Could I possibly use something like bank statements to show income? I honestly have no idea at this point. I guess the only good thing here is that the amount of money involved is not TOO great.

I think the best thing going forward is probably for me to just stop selling until I figure out what I'm doing tax-wise. I never intended to make any kind of a business out of this - my intention was mostly to just earn enough to cover a few monthly bills while I looked for full-time work.

Thanks to everyone for your questions and suggestions.

lacemaker3 · ‎04-15-2022

@baird54,

You have to report the income even when you're just doing a side hustle. You are considered a business, because you're doing it for the profit, and you can file a Schedule C: Business income and expenses. You don't need to be licensed, and you file the Schedule C with your tax return as an individual, using your SSN. Schedule C has lines to deduct all your business expenses, so you may not end up owing much if any income tax in the end.

The IRS has a lot of good explanation on their website about gig work and side jobs:

https://www.irs.gov/businesses/gig-economy-tax-center

On that page, there is a link to another IRS page that explains what you should be doing, and how to managed your records and taxes for work like this:

https://www.irs.gov/businesses/small-businesses-self-employed/manage-taxes-for-your-gig-work

IRS Publication 505: Tax Withholding and Estimated Tax explains when you need to file estimated taxes (see page 19):

https://www.irs.gov/pub/irs-pdf/p505.pdf

lacemaker3 · ‎04-15-2022

@baird54

There's lots of good info in the Get Ready to File section:

https://www.irs.gov/businesses/small-businesses-self-employed/manage-taxes-for-your-gig-work

baird54 · ‎04-17-2022

Thank you so much for all of this info. I think I'm starting to figure some of this out. Not sure if anyone would believe at this point that I did actually earn a degree in accounting once upon a time, but that was many years ago and I've rarely used it since. The thing I'm still a bit hung up on is the estimating of income. I had sales of just over $200 over the least month and a half of 2021. Assuming that's all I'm basing an estimate on, I'd say a reasonable one would be $1,700 (which will ultimately end up being more than I actually sell, but I guess that's why it's an estimate). When I'm doing these worksheets and putting in an estimated AGI, is that a reasonable number? I mean, I guess it won't ultimately matter in the end 'cause I'll either overestimate or underestimate and either pay or get a refund accordingly, but I just want to make sure I'm not being unreasonable in my initial numbers.

onefootflipper · ‎04-17-2022

I sell in the same specialty that you do. Unless you have a whole different account I don't see that you have much any actual income there unless you somehow got those cards for free.

I generally pay about 60 percent of market prices for cards like that from my sources, and have an overall 20 percent cost to sell after everything is accounted for. You sold about $500 worth of cards recently. That would only be $100 in income on my books.

If you didn't acquire those cards cheap then you might actually be looking at a loss, not income at all.

lacemaker3 · ‎04-17-2022

@baird54 wrote:
Thank you so much for all of this info. I think I'm starting to figure some of this out. Not sure if anyone would believe at this point that I did actually earn a degree in accounting once upon a time, but that was many years ago and I've rarely used it since. The thing I'm still a bit hung up on is the estimating of income. I had sales of just over $200 over the least month and a half of 2021. Assuming that's all I'm basing an estimate on, I'd say a reasonable one would be $1,700 (which will ultimately end up being more than I actually sell, but I guess that's why it's an estimate). When I'm doing these worksheets and putting in an estimated AGI, is that a reasonable number? I mean, I guess it won't ultimately matter in the end 'cause I'll either overestimate or underestimate and either pay or get a refund accordingly, but I just want to make sure I'm not being unreasonable in my initial numbers.

@baird54,

No, that doesn't sound right. If you had sales of approximately $1,700 in 2021, then that amount, plus whatever your buyers paid for shipping, is your gross payments received, not your income.

You have to subtract your business expenses, such as eBay fees, the cost of shipping labels and packaging, and your cost of goods sold to find your income. If you are selling cards that you purchased for your own collection, then the cost of goods sold would be the cost basis for them: what you paid for them when you acquired them, plus any expenses like shipping or a buyer's premium.

If you don't have records of that, then the cost basis would be the fair market value of the cards at the time you acquired them. Since you are now running a business, then you can use the fair market value at the time you transferred ownership from your personal possession to your business, which would be the sale price when you sold them.

You need to re-awaken your accounting skills, and maybe review your old textbooks to refresh the principles in your mind.

You can run sales reports in your Seller Hub to find out exactly what your payments received were, and eBay fees, and what you paid for shipping labels. Then you don't need to estimate anything.

Then, plug the numbers into a copy of Schedule C: Profit or Loss from Business, and you can figure out what your actual business income (or loss) was. That's the number that is included in your AGI Adjusted Gross Income.

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

As suggested earlier, if the cards were your personal possessions before you transferred to your business and sold them, then you almost certainly had a net loss, not a gain or income. The IRS accepts that businesses are likely to show losses when they are getting started. This method (selling personal possessions) is a very valid way to raise capital to get your business started.

onefootflipper · ‎04-17-2022

@lacemaker3 wrote:
As suggested earlier, if the cards were your personal possessions before you transferred to your business and sold them, then you almost certainly had a net loss, not a gain or income. The IRS accepts that businesses are likely to show losses when they are getting started. This method (selling personal possessions) is a very valid way to raise capital to get your business started.

Yep, when I started selling cards seriously I posted a slight loss my first year despite massive sales because of the huge amount of inventory from my personal collection that went into the business.