Thanks I will be reporting at the end of the year, so this year (will be) my first year using Turbo tax self employed. So far I have about 2.4k gross in about two months, so by the end of the year I would have passed hobby income, just needed to know how to deduct Buyer paid shipping charges reported by Mercari marketplace that is paid by buyer to generate the label. It's added to the total gross sales amount they report to IRS, which even includes my seller fees that have already been taken out at the time the sale is made. That is a direct cost to me reduced from my profit directly, unlike buyer paid shipping. Because the IRS is just looking at the total gross amount, so how would they even know that I did not profit from those shipping charges?
So it only seems fair for me to be able to deduct those shipping expenses through C.O.G.S, even though it was not an expense, but at the same time if I don't report those deductions they just use the total gross to determine my profit and will tax me on it after submitting taxes, (Total gross reported - deductions = taxable Profit) that's how they determine your taxable income (actual profit after costs), right? That was my confusion, free shipping vs buyer paid shipping. Doesn't seem fair that one can deduct and the other can't when free shipping people just raise the price of the item and don't have to pay shipping changes anyway. Your thoughts?
