You may not have to pay tax at all if you are essentially hosting an online garage sale. If you use the site to get rid of household articles you've used in the past, you may qualify for "occasional garage or yard sale" treatment. According to the IRS, if your online auction sales are the Internet equivalent of an occasional garage or yard sale, you generally do not have to report income from those sales.
Reference: https://turbotax.intuit.com/tax-tips/self-employment-taxes/a-tax-filing-factsheet-for-ebay-sellers/L... which says, in part:
"Assuming that you originally bought the used items for more money than you are selling them for, you don't have to report the income received from the eBay sale. For example, if you sell a bicycle that you paid $500 for two years ago for $350 on eBay, you usually don't have to notify the IRS—but you can't claim a loss on it."
Yes, there is some risk, you'll hear from the IRS. Keep records of what you sold.
Q. Is there a way to report it without claiming it as an income?
A. Yes. You have to use a workaround in TurboTax.
Notice that there is no specified place, in TurboTax (TT), for a 1009K. That's because you are supposed to know what type of income it is for.
In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in Home & Business)
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income
- On the next screen, click yes
- On the next screen, you'll get blanks to enter the amount and a description. It will go on line 8 of Schedule 1 as "Other Income". Suggestion for description: erroneous income on 1099K
When that's done, do it again (a 2nd entry). This time make it a negative entry; put a minus sign (-) in front of the amount. Suggestion for description: erroneous income on 1099K offset
