eBay

kevin4560_1 · ‎02-16-2023

Received a 1099K for the first time. Total sales 2022 $2,500. Very confused if I need to report this as income on my federal and state tax returns (I live in New Jersey) for 2022. I have no E-Bay store, most of the sales are from items I am selling for a friend (we split the net profits), then from other items from items around my home, and a few items that I tried to flip for a gain. I am just a little guy, retired and do this to keep busy, and keep no cost records. Would ignoring the 1099K possibly trigger a red flag or audit? Any advice or direction appreciated.

mtgraves7984 · ‎02-16-2023

I'd not ignore a figure that was provided to you and to the IRS. You'll need to list all the deductions (that you can prove) on your Schedule C. This, of course, includes FVFs, shipping, s&h materials, COGs, etc. There are many other deductions... I don't 'do' mileage, office space, unit rental fees... but some sellers do that, too. Good luck with it.

Afterthought... you're a mighty good friend to your friend. Selling under your SSN and all...

nobody*s_perfect · ‎02-16-2023

eBay has sent the 1099-K to the IRS, and they expect you to report that income. If you don't report it, they will just automatically send you a bill based on your marginal tax rate, plus interest and penalties.

Take a look at Schedule C and its instructions to see how the IRS looks at this. You can deduct expenses such as postage, eBay fees, the original purchase price of the items that belonged to you, and whatever you turned over to your friend. Until you submit the tax form and enter your expenses, the IRS has no way of knowing how much of that $2500 was taxable profit.

There are many information sources available that are more reliable than this discussion board. Here's an info sheet that the IRS put out about working with your 1099-K:

https://www.irs.gov/pub/taxpros/fs-2022-41.pdf