Home › Freelancer Profession Deductions › Ebay 1099
Tackling eBay 1099 Taxes For Sellers
There's nothing like having extra money in your pocket from selling items that were just lying around your house collecting dust. For some eBay users, this is side gig that brings in some additional spending money. For others, selling treasures and collector's items on the platform eBay is a full-time gig. Whatever the case, eBay can be a great place to buy, sell for a profit and find just about anything for sale.
But as with any business, taxes are something to be aware of when you are an online seller. One question most eBay sellers ask is, do you have to pay taxes on eBay sales? If you're earning income from eBay, the answer is yes, that income is subject to taxation. As a self-employed online seller, it's up to you to handle eBay taxes.
Key takeaways:
- Most income earned from selling on eBay is taxable, but there are a few exceptions
- Self-employment tax, income and sales tax may apply
- You should receive an eBay 1099K at the end of the year
Table of contents
Taxes and eBay sales...Read more
Does eBay charge tax?...Read more
Reporting eBay sales on your tax return...Read more
eBay business tax deductions...Read more
Taxes and eBay sales
You have to pay sales tax, but there are a couple of tax exemptions on eBay sales.
Online selling as a hobby business
Most of us probably enjoy a few hobbies, like ping pong, sewing, reading or playing chess. The Internal Revenue Service (IRS) considers a hobby to be an activity done solely for enjoyment, and the intent is not to make a profit. eBay allows users to sell items made from their hobbies, like crocheted hats, personalized name plates or a painting, for example. To help you figure out if your business qualifies as a hobby, the IRS has criteria in place:
- Do you depend on this income to make a living?
- Do you invest time and money into marketing new customers?
- Do you keep business records and run your activity like a business?
- Do you make a profit?
- Do you have any business expertise helping with the activity?
- Have you changed how you do things to be more profitable?
If you answered yes to any of these, your eBay sales are probably not a hobby.It's important to factor in the taxes you'll owe on your hobby business when budgeting. You'll probably owe income tax on eBay sales if your hobby business makes $400 or more in sales.
With a typical garage or yard sale, you're selling items from your home that you no longer need. People make offers, take the items off your hands, and you pocket the money. No need to report the income to the IRS. You might be someone who created an eBay account to sell belongings you no longer need, in what is essentially a virtual yard sale. Just like with an IRL yard sale, you won't be taxed on the items you sell, and you're not required to report your earnings to the IRS. If this activity turns out to be a business venture, and you're regularly buying items for resale, you would have to pay income tax on eBay sales in that case.
Does eBay charge tax?
Unless you're running the occasional eBay yard sale, you'll be responsible for paying taxes on eBay sales that turn a profit.
Self-employment taxes
When you work for an employer, you usually don't have to worry about US federal payroll taxes or FICA taxes since both are automatically withheld from your paycheck. Employers contributes 50% of the total tax that goes towards Social Security and Medicare for every employee. When you run your own business, you're both the employer and the employee. You're responsible for paying the 15.3% in self-employment taxes, 12.4% for Social Security and 2.9% for Medicare. A self-employment tax calculator can help you figure out how much tax you'll owe.
Income tax
Just about any income you receive is taxable, and eBay sales are no different. You'll be responsible for paying income tax on eBay sales, and you might have to pay sales tax, too, depending on where you live.
Sales tax
Sales tax might not be something you need to cover because it might fall on the buyer's shoulders as part of their purchase. Not all buyers collect sales tax, but when it's required, eBay will collect it and remit it for you. The states with no sales tax include:
- Delaware
- Montana
- Oregon
- New Hampshire
- Alaska (although some cities or towns do charge sales tax)
Not too long ago, you needed to be physically present in a state to pay sales tax. But the online business sector has changed that, and states now have the ability to charge sales tax for online purchases. This is calculated when you enter your shipping address.
Reporting eBay sales on your tax return
If you're wondering how to report eBay income on taxes, you can rest assured the IRS wants it to be fairly simple for taxpayers to make payments. If you make $600 or more in sales on eBay in a year, you'll receive a 1099-K. 1099 forms report the amount of self-employment income you made to the IRS, and it's required for all payers to send an eBay 1099K to them and a copy to you. The 1099-K form is sent to any self-employed individual who uses a third-party payment processor, like Paypal, Venmo or credit card companies. By January 31st, your 1099-K form should be available on the eBay platform, and you should receive one in the mail. It will be the same form that eBay sends to the IRS. If you used Paypal for your online eBay business, you should also receive a 1099-K form from Paypal. Even if you don't receive one from eBay or Paypal, you're still responsible for reporting your income on your tax return. Like every taxpayer, you'll report all your tax information on Form 1040, and you'll record any deductions on Schedule C. Freelancers and self-employed individuals need to pay their taxes quarterly if they expect to owe $1,000 or more in taxes. That means you're responsible for making these quarterly estimated IRS tax payments four times a year.
eBay business tax deductions
If you're running your eBay shop as a business, you might be eligible for business tax deductions. Running a business can be costly, and the expenses can add up quickly, but you deduct those expenses from your taxable income and save money.
Some other items you might be able to deduct are:
- Shipping and handling fees
- Packing including boxes, scales and tape
- Service fees
- Inventory systems
- Freelance copywriter or marketing assistants
You'll need to keep a record of your expenses using receipts, invoices or account statements. Track of all your business expenses can seem like a full-time job, but you can save yourself from the hassle by using FlyFin. All your expenses and income will be in one place, so there's no need to keep receipts or spreadsheets. A.I. will find every possible deduction, saving you time and money. An expert CPA team is available in the app to help you pay income tax on eBay sales and file your tax return.
Onlyfans Taxes
OnlyFans has emerged as one of the largest platforms for online video entertainers, and the income earned on it is subject to 1099 IRS taxes.
LEARN MORE →
Twitch 1099
Streaming has become a career for thousands of Twitch creators. The IRS has certain guidelines and procedures when it comes to filing Twitch taxes.
LEARN MORE →
Etsy 1099
Etsy is one of the largest e-commerce marketplaces for self-employed sellers, and there are certain rules and regulations in place for 1099 income tax filing.
LEARN MORE →
Airbnb 1099
If you’re an Airbnb host or service provider, you’re required to report any income you make to the IRS.
LEARN MORE →
Onlyfans Taxes
OnlyFans has emerged as one of the largest platforms for online video entertainers, and the income earned on it is subject to 1099 IRS taxes.
LEARN MORE →
Twitch 1099
Streaming has become a career for thousands of Twitch creators. The IRS has certain guidelines and procedures when it comes to filing Twitch taxes.
LEARN MORE →
Etsy 1099
Etsy is one of the largest e-commerce marketplaces for self-employed sellers, and there are certain rules and regulations in place for 1099 income tax filing.
LEARN MORE →
Airbnb 1099
If you’re an Airbnb host or service provider, you’re required to report any income you make to the IRS.
LEARN MORE →
What’s FlyFin?
FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors.But anyone can file taxes through FlyFin! FlyFin tracks all your business expenses automatically using A.I. technology. Then, our CPA team files a guaranteed 100% accurate tax return for you – to save you a couple thousand dollars and a ton of time on your taxes.In addition, you can download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and money.
Expert tax CPAs ensure 100%-accurate tax filing
A.I. finds every tax deduction, eliminating 95% of your work
On average users save $3,700
Was this tip useful?
Yes
No
Freelancers save $3,700 extra
BlogPartner with usFlyFin member perksPrivacy policyTerms of serviceContact UsSitemap
For more information & tax tips follow us on
More about FlyFin
FlyFin is the world’s #1 A.I. and CPA tax filing service for freelancers, self-employed, business owners, 1099 & W-2 workers. A.I. finds every tax deduction and starts to build your tax returns, saving you hours of tedious work. A dedicated CPA prepares your federal & state tax returns from start to finish and ensures your taxes return with precision. A.I. and CPAs work together to make your tax filing 20x faster and 5x cheaper. Act now and file your IRS tax returns with FlyFin before the last day to file taxes in 2024.
With FlyFin:
A.I. eliminates 95% of your work: A.I. analyzes your expenses, identifying every tax write-off automatically. This helps freelancers and self-employed individuals filing Schedule C with their 1040 forms save $7,800 on average, more than in previous years.
Dedicated CPA file taxes from start to finish : You're assigned an expert CPA to prepare your federal and state tax returns for your review and e-sign. When everything is ready and reviewed, the CPA will efile the income tax federal return, and your taxes are complete for the year.
Pay quarterly taxes: A.I. & CPAs help you accurately calculate your quarterly tax and ensure timely payments to avoid any IRS penalties.
Maximum tax refund guaranteed: 75% of tax filers miss out on taking all deductions. A.I. doesn’t forget anything and keeps track of every deduction 24/7. A dedicated CPA reviews every deduction, calculates your taxes precisely and suggests tax-saving strategies.
Federal & state taxes covered - No hidden costs: Our tax team members are experts in all aspects of US & international taxes. We file federal and state tax returns for all types of entities - Sole proprietors, LLCs, S-Corps, K-1s, W-2s, etc.
Tax preparer near me: Discover the convenience of virtual assistance with FlyFin, eliminating the need to search for a tax preparer. Our A.I. and expert CPAs are just a click away, ready to guide you through your IRS income tax return.
Full audit insurance at no cost: In case of an audit, your CPA handles the IRS. They evaluate your tax situation, prepare responses and communicate with the IRS on your behalf.
100% Money back guarantee: We offer a 100% refund if you are dissatisfied with the service & don't want our CPAs to prepare your federal tax returns.
FlyFin is a more affordable alternative than traditional tax services like TurboTax and H&R Block. FlyFin powers its bank-level security using Mastercard and Plaid, making FlyFin trusted by over 25,000 financial institutions. We protect your name, email address, phone number and more through compliance with the California Consumer Privacy Act, the highest data privacy standard in the US.
Copyright ©
2024
FlyFin Inc. All Rights Reserved.
