To report a loss on your 1099-K earnings, the process differs depending on whether the items were sold as personal items or as part of self-employment. Here’s how to handle both scenarios:
Reporting Loss for Personal Items
If you sold personal items at a loss, you cannot deduct the loss on your tax return. However, you can report the income to ensure you don't pay taxes on it. Here’s how to do it:
- Report the Income: Enter the income from the 1099-K on your tax return.
- Offset the Income: Subtract the income by reporting it as a loss. For example, if you sold a dining table for $750 but originally bought it for $1,250, you can report the $750 as income and then offset it by reporting the same amount as a loss.
To enter a 1099-K for-sale of person items, see steps below:
- Open or continue your return in TurboTax
- Go to search bar and type 1099-K
- the click the jump to 1099-K link
- Follow the onscreen instructions to enter your 1099-K.
Reporting Loss for Self-Employment Income
If the items were sold as part of your self-employment, you need to report the income and expenses on Schedule C. Here’s how to do it:
- Enter the Income: Report the income from the 1099-K on Schedule C.
- Deduct Expenses: Deduct any expenses related to the sale of the items. This includes the cost of goods sold, shipping, and other related expenses.
To enter a 1099-K for self-employment income, see steps below.
- Open or continue your return.
- Go to Schedule C.
- Answer the questions about your business and its expenses until you get to the Here’s your info screen.
- If you’re returning to Schedule C, select Review or Edit next to your work and then answer the questions about your business.
- Select Add income for this work.
- On the Let's enter the income for your work screen, select Form 1099-K and Continue.
- Enter your 1099-K info.
In either scenario, TurboTax will help you complete the appropriate forms related to the 1099_K.
If something else is needed, provide additional details and reach back out.
.
