How is everyone handling 1099-K forms on taxes?

[milkyway10024]

Hi: I hope this question is allowed. I'm doing my taxes myself and trying to figure out where to report the money I earned from eBay last year on the tax forms. I made roughly $4,000, give or take, but that's gross. It looks like IRS Schedule C but that's asking about business name and several other questions that don't apply. I don't have a business per se -- I just sell books and a few other things.  I also don't see a line on Schedule C for subtracting the cut that eBay takes. Thank you! Is there a simpler still-legal way to report it?  

[monica-sells]

Each individual situation is unique.

There is no "1 size fits all" answer....

There are various guidelines that IRS instituted to "help" you determine where and how to report your income.

I am not trying to be condescending.....but--

"... I also don't see a line on Schedule C for subtracting the cut that eBay takes..."

If you can't see where to input your legitimate deductions/expenses on Schedule C you need to seek outside assistance, because that really is accounting 101.....

Also, there are quite a few threads on this forum for some initial guidance

(incidentally--Part II---Line 10)

[travelandtreasure]

@milkyway10024 

Check out the eBay for Business Podcase - their episode #281 on Feb 20th 2024 talks about reporting the info on your taxes. I found it very useful. 

ps- they announced they are changing the name of the podcast to "eBay for Sellers" soon, not sure if they have yet

[milkyway10024]

Thanks, I'll look for that. 

[milkyway10024]

OK thanks. I do see a line to put expenses -- such as the cost of the books I sell and postage. But I don't see a line for the percentage that eBay takes from each sale. The $4,000 I earned is, as you all know, misleading given the expenses and eBay cut and postage. Not what I actually earned is what I'm trying to say. 

This isn't a lot of money and I'd like to report it legally and all but just wondering what simplest way to do that is. 

I'll look for Part 2, line 10. Thanks. 

[gwens*4saleitems*]

you wrote -"OK thanks. I do see a line to put expenses -- such as the cost of the books I sell and postage."

The percentage that eBay takes, meaning selling fees, IS an expense.

[milkyway10024]

"The percentage that eBay takes, meaning selling fees, IS an expense."

Thanks! Yes, I see what you mean, but wasn't thinking of it the same way as my initial cost for the books or packaging materials. 

[nobody*s_perfect]

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@milkyway10024 wrote: ... It looks like IRS Schedule C but that's asking about business name and several other questions that don't apply. I don't have a business per se -- I just sell books and a few other things.  I also don't see a line on Schedule C for subtracting the cut that eBay takes....

---

You do have to use Schedule C if you made a profit and want to deduct expenses.

Don't worry about the business name; for heaven's sake, it says right on the form, "If no separate business name, leave blank."

I've always put eBay fees on line 10, "Commissions and fees," and the IRS has never complained. I suspect that as long as an expense is valid, it really doesn't matter which line you put it on. After all, whatever line you choose for your expenses, it all gets added together for line 28.

[oaklandmaryland]

I use Turbo Tax for Home & Business and every little detail gives you prompts- easy this way.

[milkyway10024]

Thank you Nobody's Perfect and Oakland Maryland. 

Super helpful. 

I am thinking of Turbo tax so that's great to know which one to get if I decide to do that. Do you do the 'online' option or the download?

[chariot_badges]

Easy.

Schedule C on your tax return.  Put the $4000 you made as top income money.

Under that number, on the schedule, it will ask for deductions.

Subtract

The Cost of Inventory ................................................. $2000

Shipping and handling  ................................................   900

Utilities and rent .............................................................  1200

Repairs and maintenance ofc equipment    .............  150

Advertising and platform expense (Ebay fees) ......  750

Subtract all that from your 'income' and pay that huge tax bill of $0

You're numbers will vary, I'm sure, but you get the idea.

Zero it out.

And don't phreak out about having to prove it with documentation.

You know your numbers pretty close, in your head.  Use those approximate numbers. 

The IRS is a toothless giant, counting on their 'bad boy' reputation.  But they are like an old, bald arthritic gangster.  They only hunt 'rich people' because that's where the real prize is.

You are not rich. 

[milkyway10024]

Thank you Chariot Badges. I hear you. Yes, I'm leaning that way -- make a good faith effort to get it close and do it legally and hope they're not going to go after me if I'm a few dollars off or overestimating the cost of tape. 

"The IRS is a toothless giant, counting on their 'bad boy' reputation.  But they are like an old, bald arthritic gangster.  They only hunt 'rich people' because that's where the real prize is.

You are not rich." 

Yea, 100 percent. 🙂

[caldreamer]

EBAY has "easy to read" 1-page report that shows YTD totals for (gross sales/order, refund, EBAY fees, shipping expense).   This will be very helpful during tax time.

You must report "gross sales" (as shown on report) and then subtract (refunds, EBAY fees, shipping expense (cost to print label) and any other expenses related to your business.

[milkyway10024]

Thank you Caldreamer. I actually just found that report. It helped to answer what that 1099K figure included. Thanks for your reply.  

[asset_liquidators]

No, that is bad bad advice. They don't only "hunt rich people". Matter of fact, it is easier for them to go after smaller people because they are counting on poor record keeping. I know of people that have been audited and believe me when I tell you their income was next to nothing and they got nitpicked down to every last dollar!

My advice would be to keep good records and report as accurately as possible.