Help! Doing my taxes and have the 1099K

[liawrig.nq8rdwqa3]

I'm using HRBlock online tax forms.  And here's what I don't understand.

Step 1.  I choose sell of personal items (Explained as a garage sale, selling somethinc via online marketplace)

Step 2.  Enter the amount  under 1A

Step 3. (this is what I don't understand)  Let's make a list of everything you sold.    Description, item, Length of ownership.

WTH?

I never had to do this.  Do I have to list everything on my spreadsheet?  When did this happen.

Comment:  This is ridiculous and will run away a lot of "smaller" sellers, or cause the IRS to audit taxes.

[buyselljack2016]

@liawrig.nq8rdwqa3 

per the 1st reply.

file as a business, as that is what you appear to be.

I do mine online without the assistance of a tax professional. I doubt that I am leaving more on the table than a tax professional would charge.

As a small seller, if I can do it, pretty much anyone can

[mega-ma-roo]

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@nobody*s_perfect wrote:

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If you make a profit then the IRS considers you to be a business 

If you do not make a profit, then the IRS considers your eBay sales to be a hobby,

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This is not correct. There are many businesses that do not make a profit and there are many people who sell personal items and do make a profit and are not hobbyists. There are hobbyists who make a profit and hobbyists who do not make a profit. 

[nobody*s_perfect]

Here are details about how the IRS distinguishes between hobby and business:

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

[mega-ma-roo]

I am familiar with the article you cited. Nowhere in that article does it say anyone making a profit is a business nor does it say anyone not making a profit is a hobby. As I said, there are businesses that do not make a profit (it took Amazon 14 years to become profitable) and there are hobbyists that do make a profit (horse racing is often cited as an example).

[stainlessenginecovers]

You are a business; items you are selling and/or sold the past 90 days are NOT items out of your closet. 

Therefore, you're attempting to sell things by buying things (pallets of returns or?)

So, the form you are using on HR Block is for the "I sold a few of my personal things"- usually less than 20 items and having/making a 'list' would not be an issue. 

Also; a 1099 is a Form that is sent to you from a Bank, a Business or a Processors (1099 INT, 1099K etc.

Schedule 'C' is what is filed along with your 1040. It is PART of your 1040. 

Since you are very clueless on the differences between a form you file and a form you receive, you REALLY REALLY need to GO TO an HR Block Office and have your taxes done. If you spend $300, that is also tax deductible. But, that's what businesses do. They 'pay' to have their taxes done (well, most do)

[stainlessenginecovers]

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@mega-ma-roo wrote:

I am familiar with the article you cited. Nowhere in that article does it say anyone making a profit is a business nor does it say anyone not making a profit is a hobby. As I said, there are businesses that do not make a profit (it took Amazon 14 years to become profitable) and there are hobbyists that do make a profit (horse racing is often cited as an example).

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For the MOST PART- a 'business' is 'attempting' to make a profit. You can't compare a Corporation (Amazon) to the typical 'small business' or 'small business person'.  If you show a 'loss' against your 'investment' or your W2 from a 'regular job' for more than 2 years, the IRS will set up a "meeting" with you to discuss why you are 'attempting' to be a profitable business yet throwing money out the window. 

[mega-ma-roo]

The statement was made that if you make a profit, IRS considers you a business. That is not correct.

The statement was made that if you do not make a profit, IRS considers you a hobby. That is not correct.

I used Amazon to point out that at no time during those 14 years was Amazon considered a hobby. 

[turarmory]

I hope you got your taxes sorted by now. All of those 1099's are just info that both you and the IRS get. You can report that income a number of ways. I've never done the rout you've found on HR Block with all of that itemized sales stuff, but I do use HR Block to file Schedule C(If you file as a business). If I have 1099's to report, I can do so a number of ways as long as I can explain to the IRS where it was reported when asked; They just want their cut as long as it happens somewhere. 

I would recommend that you learn how to do Schedule C the way I did. I went to an HR Block office for a couple of years to have them do it, and learned what numbers they need to know for Schedule C. Afterwards, I realized I didn't need to pay a human to ask me for these numbers when I could just enter them online, as I'm still doing all of the accounting in that situation. 

If you're selling enough items to reach a 1099 threshold, and itemizing all of those sales is a pain, you should file as a business; As a business, you file a Schedule C(HR Block pulls this up for you if you tell them you're a business), and it is a much easier way to manage all of that. You mainly just need to know what you made, what you spent on supplies and services, and what you spent on things that you sold, and if you acquired those things this year or had them from last year. There's more to it, but that's the gist.