Where do i file the 1099-k in turbotax?

[david9726]

I received a 1099-k from paypal but i am unsure where to enter it's info. I have asked turbotax but they have not been much help they have told me to file it as a hobby or in Schedule C  so i am wondering what others are doing.

BTW i am just a individual on ebay that sells once in a while to help pay for other items such as i sold a PS4 to help pay for a PS5 so i do not see it as income but i will file it, i only sold $2000 worth of items.

Thanks for the help.

[coastaltechsolution]

Schedule C 

[coastaltechsolution]

I'm not a CPA so take this with a grain of salt but to the IRS you are a Sole Proprietor

The income you make (extra like on here) flows into your income (Individual) so you must pay self employment tax on the money generated 

Just get your expenses in order, like supplies you purchased for shipping and all that to help offset 

[slippinjimmy]

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@david9726 wrote:

I received a 1099-k from paypal but i am unsure where to enter it's info. I have asked turbotax but they have not been much help they have told me to file it as a hobby or in Schedule C  so i am wondering what others are doing.

BTW i am just a individual on ebay that sells once in a while to help pay for other items such as i sold a PS4 to help pay for a PS5 so i do not see it as income but i will file it, i only sold $2000 worth of items.

Thanks for the help.

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If you bought things for personal use you are likely selling them for less than the original purchase price so you are likely reporting a loss and not incur any income tax.

It's "gross income", after deductions it should be a "net loss".

[nobody*s_perfect]

The IRS and your state do see your sale of the PS4 as income, that's why you got the 1099-K. As noted in the other post, you should file Schedule C with your 1040. If you read its instructions, you'll get  a better idea of what expenses you can deduct to reduce or possibly eliminate your tax liability. Hobby vs business doesn't matter.

[slippinjimmy]

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@coastaltechsolution wrote:

I'm not a CPA so take this with a grain of salt but to the IRS you are a Sole Proprietor

The income you make (extra like on here) flows into your income (Individual) so you must pay self employment tax on the money generated 

Just get your expenses in order, like supplies you purchased for shipping and all that to help offset 

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It's not business income unless you purchased the items with the intent to resell. Selling personal items can trigger a Capital Gain but in most cases like the OP it's a Capital Loss.

[david9726]

Yes i lose money on every sale. I paid $399 for the PS4 sold it for $200 plus the seller fees.

Everything i sale is like that. Mostly electronics.

[coastaltechsolution]

But everything deprecates 

If you have the original receipts then claim it on your taxes as a loss 

If the PS5 is out now why would you expect the PS4 to hold it's original off the shelf value?  

[david9726]

I don't expect it to hold it's value with electronics there is always something better around the corner. I sell the old PS4 to help pay for the newer PS5.

Looking in Schedule C of where to input that.

[mam98031]

TurboTax is an excellent program.  Follow the instructions for the program and you should be fine.  We use it every year.

And yes it is the Schedule C where this info gets recorded along with your expenses.  The form is pretty easy to use, just read each section and fill in the blanks.

Most things that we sell from our personal stuff will never fetch the price we paid for it.  That is pretty normal.  You got use out of the item therefore it simply isn't worth what it was when you bought it.

https://www.irs.gov/pub/irs-prior/p525--2019.pdf

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf

[david9726]

So you guys are entering the original cost of the item you sold in expenses? Are you also entering your internet bill, the pc you used to list the items, the printer.

It's confusing since i have bought turbotax to download and the online version seems to have better support and ask different questions that the download version does not.

[mam98031]

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@david9726 wrote:

So you guys are entering the original cost of the item you sold in expenses? Are you also entering your internet bill, the pc you used to list the items, the printer.

It's confusing since i have bought turbotax to download and the online version seems to have better support and ask different questions that the download version does not.

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You need Turbotax version that has the Schedule C.  

Doing taxes with TurboTax isn't that scary.  The program will ask you questions and you give answers.

Make sure you are keeping accurate business records.  Both for sales and your costs of sale.  Know that your income for your online sales is NOT limited to any amount that appear on a 1099K.  Even if you don't qualify for one of these forms you are still responsible for claiming your sales / income.

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

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf

https://turbotax.intuit.com/lp/ppc/2286?srqs=null&cid=ppc_gg_nb_stan_all_na_schedules-c_ty20-bu20-sb...

[ebapc]

I received the 1099-K after I already filed because I wasn't expecting it. Have to wait until March to file an amended return. So now we're supposed to pay extra to the likes of TurboTax to file as a business because we basically had an internet garage sale. Guess I won't be selling on eBay anymore.

[mam98031]

@ebapc 

Your state has a requirement for 1099Ks to be issued.  Ebay is required by law to abide by your state's requirement.  It isn't Ebay's responsibility to notify you of your state's requirement.  Your state passed a law on this so one would hope residence were notified.

In the meantime, while you wait for the time when you can file your amended form with IRS, learn about selling off your personal items.  Learn what is taxable and what isn't.  You don't necessarily owe more taxes.  But you need to learn the rules to guide you.

IDK why you feel you need to pay for Turbo Tax now.  While it is a great program for the cost, I'm simply not sure as to why you need it now.

[slippinjimmy]

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@ebapc wrote:

I received the 1099-K after I already filed because I wasn't expecting it. Have to wait until March to file an amended return. So now we're supposed to pay extra to the likes of TurboTax to file as a business because we basically had an internet garage sale. Guess I won't be selling on eBay anymore.

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You can use the free editable PDF the IRS provides for Schedule C

https://www.irs.gov/forms-pubs/about-schedule-c-form-1040

If you are using any of the free tax prep software the Schedule C is the only thing you would need to complete manually, if you show a profit then just transfer the total to line 3 of Schedule 1 of your 1040.