"Hello, I'm new to selling but might pass the $600 threshold for sales in 2024. I'm not doing this as a business, so I can't file for tax exemption.
- What is considered part of the $600? On the eBay Seller Hub, it says my 90 day total is $196, but with fees and shipping costs, I made much less than that. Would the $196 buyers spent all count as money made, although I myself didn't receive all that money?"
The amount reported/shown on the 1099-K is the total of item prices and shipping costs paid by your buyers. Sales taxes paid by your buyers are not included in that amount, nor is that amount reduced by any refunds you/eBay paid back to your buyers.
- "Once I pass $600 made, eBay is required by the IRS to send me a 1099-K form. How does this work? Do I just fill out the form? Or when I file taxes in the spring will I have to write something about my eBay sales? How does selling on eBay affect normal tax filing?"
Interesting questions. How the 1099-K works, and "do [you] just fill out the form?"
There is nothing on the 1099-K form for you or any eBay seller to fill out.
The 1099-K is something like an annual statement or maybe a report card. It's the form that eBay is required to use to tell the IRS ("report") how much money they paid out to you based on your eBay sales during the previous year.
The last two questions can kind of be rolled together for an answer.
First, of course, your best option for getting tax advice is consulting an actual expert, CPA, accountant, H&R Block tax preparer, etc. Advice you get here on the eBay Community pages cannot be considered legal authority by any stretch of the imagination.
You say you "can't file for tax exemption." You don't need to be a multi-million-dollar corporation or even multi-thousand-dollar eBay seller in order to take certain legally-allowed deductions. A tax preparer may be able to help you take some of those deductions and reduce your income tax liability.
But in general, yes, you are supposed to list all of your income on your 1040 (or appropriate version) tax return form in the spring -- regardless of whether that income is reported to the IRS on a 1099-K, a 1099-INT (interest), a 1099-NEC (non-employee compensation), or even a W-2 (employee wages paid by an employer).
Using the number in your post, if you end this year having sold only $196.00, eBay will not be required to send you or the IRS a 1099-K report/form. However, you are expected to list those 196 dollars as income on your 1040 tax return form.
How selling on eBay affects "normal tax filing" is that you'll just have another number to add in with all your other income ("day job", side hustles like Uber driving, rental income on all that investment property you own, bonuses paid by your employer, dividends earned on your massive stock holdings, etc., etc.).
The IRS expects all of us taxpayers to be honest, to report all our income, and to pay the income taxes that are due.
