Hello, I'm creating this specific post because I asked this question part of some other threads, but it looks like I can't have an understandable answer. This should be very easy for a TurboTax expert.
I think this is a very basic question that thousands of eBay resellers will want to ask to TurboTax, considering that almost everyone on eBay with a gross income more than $600 is receiving a 1099-K.
Here is the very simple description.
I'm an eBay reseller, I buy new stuff and resell it on eBay. I'm now trying to complete my 2022 tax return including my eBay income, for which I received a 1099-K.
I'm using TurboTax Self-Employed (online). I upgraded from DeLuxe when TurboTax told me that the Self-Employed version will help me managing the expenses very easily.
So far, after spending a few hours on TurboTax, after reading several posts, I'm still unable to understand where I can add the cost of goods.
In my business I buy stuff (new) and I sell that stuff. Form 1099-K just received from eBay only includes the GROSS income. I need to be able to also enter the cost of goods (how much I paid for those items that I sold) so I can pay my taxes only on the profit portion (profit=gross-expenses) not on all the gross amount reported in the 1099-K.
Here is what I tried to do:
- I first add the new self employed income
- Then I'm prompted the following:
Advertising
Handmade goods sales
None of these apply.
and I select "non of these apply" because I just resell new item, like small electronics, for instance).
- Then I select that this is a Business and I follow the few prompts
- Then I see the summary info and select "Looks Good"
- Then I enter the gross info from my 1099-K from eBay (I also tried skipping this for later, same results)
- Next I see this message: "We found 11 expense categories that others in eBay often claim!", but there is no inventory (I see Vehicle, Home Office, Communications, Assets, Supplies, Advertising, Meals (50%), Legal and Professional Fees, Business Travel, Office Expenses, Meals (100%))
What should I do to see the inventory, so I can enter the cost of the purchases items?
I'm very frustrated because the majority of eBay resellers are just selling new items purchased somewhere else. It is extremely important to enter the items expenses because my actual profit could be just a 10-15% of the gross income mainly due to the cost of the items before selling them.
Why is this so difficult to find? Is there a basic mistake that I'm doing while entering the income?
Last but not least, in this TurboTax article it is specified very clearly the list of deductions allowed by IRS to reduce the gross income, and the first one in the list is "Costs to purchase or fix up the items sold". Well, where can I enter it in my tax return with TurboTax?
https://turbotax.intuit.com/tax-tips/self-employment-taxes/a-tax-filing-factsheet-for-ebay-sellers/L...
Please help 🙂
Thanks a lot.
