Today I deleted about 120 listings-Done for the year already because of IRS 1099 2025 limits

[hiroprot]

Deleted 120 listings today. Just discovered that 2025 threshold for 1099’s drop to $2,500 (and just $600.00 in 2026) and zero guidance regarding can you document what you paid for items later sold and document profit only as income vs IRS assuming your gross sales are all income. Im done with EBay until 2026. Ebay and similar sites will wither away to nothing soon unless this stops.

[mam98031]

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@hiroprot wrote:

Especially in instances when I sold at a net loss to begin with, how to report..

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@hiroprot 

Like you do any other sale.  There is no GOTCHA here.  Businesses do make sales from time to time that they make no money on and some they even take a loss.  Pretty normal stuff.  Yet ALL income is reported less ALL costs.  

If you are trying to separate out things you don't make any money on from things you do, it simply isn't necessary.  It is a good thing to know as a business, but it doesn't change the fact that the IRS expects you to report ALL your income.

Income less costs = net taxable income.

[mam98031]

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@jerseyboymusic wrote:

My wife does our taxes... I believe she uses Schedule C for self employment

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A schedule C is for detailing your COSTS of business.

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

[jg.mason]

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@kensgiftshop wrote:

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If you use one of the programs they have now days, it's pretty easy and it takes you step by step.

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Great advice. I did my taxes in an hour and a half this morning using H&R Block software.

[stainlessenginecovers]

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@hiroprot wrote:

Some folks not reading or understanding situation. I have zero problem reporting profit as income.Many items sold at a loss to raise money for huge medical expenses, i found some guidance regarding Schedule D but no clear guidance what forms to use to document accurate profit or losses vs them assuming net gross sales are  100 percent taxable, I will check out Schedule C as someone recommended, total rookie and little guidance anywhere on this. 

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@hiroprot go spend $40 and talk to anyone at HR Block- they are everywhere, inside Walmart etc. There IS a way to 'determine cost of goods purchased long ago'. 

[thekittyshop]

I would recommend checking out Not Your Dad's CPA. He's a former reseller and he's a full time accountant that does a lot of tax preparation for resellers so he knows the ins and outs. He also sells a course but his YT videos are really good and can get you by. I did take the course and would recommend it to any reseller.

https://www.youtube.com/@notyourdadscpa/videos

The best thing you can do is keep all of your receipts (I scan mine all into a folder on my computer) and to start a spreadsheet. I have a rather complicated one that I built out but it has made my life easier each year because I just have to plug in my expenses and numbers from sites/1099s and it does all the calculations for me. My husband and I use Turbo Tax so it will prompt you for the information piece by piece so if you have your bookkeeping up to date before you start it should be very easy. Keeping track of your expenses will lower your taxable burden, they will only tax you on profit not your gross. But if you can't prove your expenses it could be an issue if they do choose to audit you. I have been doing this since 2020 (in January before the chaos started and didn't know what I was getting myself into) and I have not been audited. But if I were, I have all the receipts saved. 

[az93]

I have always reported my ebay earnings for income tax, no matter how pitiful.  I like to sleep at night. 

[reallynicestamps]

That was a pointless exercise.

The eBay form would make it easier to show what your gross income from eBay was. Then you take the receipts from shipping, procurement, packaging purchases, etc, subtract them, and you have your net eBay income.

Without the form, you have to work out your gross income all by yourself.

I understand that many states want the form from venues that show $600 gross income.


Many who panic over this form have never actually run their numbers and do not realize that what they thought was a profitable side hustle is actually a money losing hobby.

You may also be interested to know how graduated income tax works.

https://taxfoundation.org/taxedu/glossary/graduated-rate-income-tax/

[animal-house-8]

Never said I avoided them had 2, but they never even questioned COGS which would not have mattered if they did I have receipts for everything. 2 audits in my life resulted in refund check of $6.00 and one for $14.00, and still today I think I did those taxes correct but who am I to argue.

[mam98031]

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@animal-house-8 wrote:

Never said I avoided them had 2, but they never even questioned COGS which would not have mattered if they did I have receipts for everything. 2 audits in my life resulted in refund check of $6.00 and one for $14.00, and still today I think I did those taxes correct but who am I to argue.

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It is unusual for IRS to audit a person twice unless they found significant issues the first time.  Sorry you had to endure that.

[fbusoni]

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@hiroprot wrote:

 Ebay and similar sites will wither away to nothing soon unless this stops.

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Nah. 

Because NO ONE does what you did.

[inhawaii]

Stop selling to save on paying taxes.

What a great idea.

Wal-Mart should do that.

Suspend all sales and save on paying taxes.

Of course they'll also be losing out on profits.

[hiroprot]

These links are greatly appreciated, eBay itself seems to have no easy to find information or links for folks unfamiliar with how to document cog, have been entering cog into excel the last few days, but definitely need to check out these links before feeling comfortable submitting the schedule C . I have 100 percent satisfaction rating from buyers, perhaps will keep a few items listed to keep active, until I know this all came out as expected. Thanks 

[winterpalace25]

Did you not know that you were responsible for paying income taxes on your profits that were under the threshold? How many years have you not paid taxes?

My husband was self employed for many years and I kept his books, including paying his quarterly taxes. Once I was complaining to my father about the 15% self employment tax on top of income tax. He was self employed all his life and told me to welcome high tax bills because it meant YOU WERE MAKING LOTS OF MONEY.

[mam98031]

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@hiroprot wrote:

These links are greatly appreciated, eBay itself seems to have no easy to find information or links for folks unfamiliar with how to document cog, have been entering cog into excel the last few days, but definitely need to check out these links before feeling comfortable submitting the schedule C . I have 100 percent satisfaction rating from buyers, perhaps will keep a few items listed to keep active, until I know this all came out as expected. Thanks 

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@hiroprot 

Sure they do and I posted them for you here in Post #20.  Ebay has been extremely supportive of sellers on this subject.  Heck they fought for YEARS to prevent the 1099K from even getting implemented, likely causing it to get significantly delayed from actually coming to life.

Ebay also offers you several different reports in which you can get the information you need to figure out your sales and your COGS here on the site.  They of course have no knowledge of your COGS that does not run through the site, nor should they.

[gloryglorygifts]

It's Schedule 1 and Schedule C that are included with your 1040 for business, along with a Schedule A for your itemized personal deductions. Schedules 1  and C seems to be the most important one for you, as that is where your losses will be recorded for your business. Schedule D is for capital gains for sales and losses for things like real estate, stocks and bonds. 

Good luck to you.