Ebay/Poshmark and taxes/deductions

[mytabbycat]

I sell on poshmark and ebay, most of the items are for profit. I don't make a ton, maybe $3,000 or so a year if I am lucky. It seems I will be considered a "self employed" from IRS standards and have to pay self-employment tax. Can I deduct my ebay fees, shipping costs, and price I paid for the item on my taxes? I've seen people say you can only deduct certain things if you have a business license or LLC. Do I need to get either of those in order to deduct the above or am I still able to deduct those expenses without having to do that?

[PatriciaV]

Yes, as a self-employed entrepreneur, you may deduct all business expenses related to your eBay/Poshmark sales. This business activity would be reported on Schedule C of your tax return. Any profit would be subject to self-employment taxes. You do not need to create an LLC in order to file as a self-employed business. Your State would determine if you need a business license to operate online.

Inventory, business assets, income, and expenses are reported in the Business section of TurboTax Self-Employed Online. To find this section, search on "schedule c" to jump to the start of that topic.

Additional Info:

• Beginner's Tax Guide for the Self Employed 
• Tax Tips for the Self-Employed
• Side Giggers - Tax Tips for Side Jobs