Casual eBay Seller Getting Ready for Tax Year 2022 1099-K (2024)

FAQs

Why did eBay send me a 1099-K for 2022? ›

If you've sold goods through eBay and the total sales exceed the IRS threshold, the IRS requires us to send you a Form 1099-K.

You should also know that many sales on eBay aren't taxable, so even if you have $600 or more in sales and we issue you a 1099-K, you won't necessarily be taxed on those sales because in most cases, you wouldn't owe any taxes on something you sold for less than what you paid for it.

If you're making a profit on the items you sell you need to declare the earnings on your income tax. The only legal way to avoid filing taxes on eBay earnings is not selling what you're buying.

The 1099-K gross amount is entered on Schedule 1, Part I, Line 8z as “Other Income” along with an explanation such as “Income Reported From 1099-K”. Use IRS Form 8949 to claim the sale as a non-deductible loss using Code L. The total proceeds/cost amount is also entered on Schedule D as a non-deductible loss.

Recap of the IRS reporting changes

For tax year 2023, eBay and other online payment platforms are only required to report transactions to the IRS once you hit an annual threshold of $20,000 in gross payments and at least 200 transactions.

Although the Form 1099-K reporting threshold for 2023 is $20,000, companies could still send the form for totals over $600. No matter the amount, if you receive payments for selling goods or services or renting property you must report your income.

However, due to a tax law change, a single transaction on a payment network of just $600 could trigger a 1099-K. Some people call this the “600 rule.” The IRS delayed the rule Implementation last year, but that change and the most recent 1099-K delay for the 2023 tax year continue to cause confusion.

IRS announces another delay of the $600 reporting threshold for Form 1099-K. In some excellent news for millions of eBay sellers, the Internal Revenue Service (IRS) announced another delay of the $600 reporting threshold for Form 1099-K.

If you use apps or online marketplaces to receive payments, it helps to know what to expect on the Form 1099-K and how to avoid potential errors. If you received a Form 1099-K this filing season, don't ignore it.

How much can I sell on eBay without getting a 1099? ›

Know that you need to report your income over $600 REGARDLESS if you get a 1099 or not; if the 'threshold' is $20k/200 transactions and you do $15k and NOT report it with your Federal Taxes, you are committing Tax Evasion.

Only goods that are sold for a profit are considered taxable, so you won't owe any taxes on something you sell for less than what you paid for it. For example, if you bought a bike for $1,000 last year, and then sold it on eBay today for $700, that $700 you made would generally not be subject to income tax.

Personal items sold at a gain

If you made a profit or gain on the sale of a personal item, your profit is taxable. The profit is the difference between the amount you received for selling the item and the amount you originally paid for the item.

If we sold more than $600 worth of anything during each year, it will be reported to the IRS and their system will treat it as reportable income. Even if you are selling at a loss, or reselling a used item of yours, and you won't legally be required to pay any tax on it.

Although the Form 1099-K reporting threshold for 2023 is $20,000, companies could still send the form for totals over $600. No matter the amount, if you receive payments for selling goods or services or renting property you must report your income.

If you sell and buy articles on eBay in order to earn money, the IRS will likely classify your sales activities as a business. This means you will have to report net income from eBay sales.