I’ve been selling on eBay as a side hustle for a few years, but 2024 was my biggest year by far. I just got my 1099-K, and I’m freaking out a little.
From what I understand, I have to report everything as income, right? The thing is, almost 95% of what I sold was stuff I found for free. If I have to report all of that as profit, am I completely screwed?
I’ve been feeling really anxious since I got the form. Any advice would be super helpful. Thanks!
Scout said:
What kind of stuff are you finding for free?
Books. I have access to a place that lets me look through their inventory before they throw stuff away. A lot of the books turned out to be valuable, either as sets or individually.
@Ash
Are you picking up these books just for fun, or are you specifically looking for ones to resell? Did you keep any of them for personal use before selling?
Scout said: @Ash
Are you picking up these books just for fun, or are you specifically looking for ones to resell? Did you keep any of them for personal use before selling?
Most of them were bought with the intention of reselling. A few I actually read and kept for a while before selling. I don’t have receipts or any transaction history since I got them for free, so does that mean I have to report 100% as profit?
@Ash
For the books you picked up knowing you’d resell them, you should report that income on Schedule C. You can deduct business expenses like eBay fees, shipping supplies, and anything else related to running your business.
For the books you kept and read first, those are considered personal-use items. When you sell them, you report it on Schedule D and Form 8949. The downside is that you can’t use business expenses to offset the income from those sales.
And yes, you have to pay tax on the profit. But it’s probably not as bad as you’re thinking… unless you already spent all the money.
@Kenan
Great advice! I’d definitely look into home office deductions. But let’s be real—how much of the phone and computer is actually business use? 0.1%?