@user3143 wrote:
I have entered my ebay sales under hobby. Doing this reduced my tax refund by $1500. This seems crazy!
I sold used items. Totaling $4900 in sales that probably cost more. When I put the cost in as the same as the sales my tax refund remained at $1500 less than it was.
Why would I pay $1500 in taxes on $4900 worth of used crap sales?
Please help me put this in turbo tax another way so that it isn't hurting me.
Thank you!
You have posted to the bottom of a 2 year old discussion that answers all your questions. Did you read the entire discussion?
https://ttlc.intuit.com/community/taxes/discussion/ebay-sales-and-1099k-s/00/1695360
Briefly, you only have taxable income if you sell items for more than you paid for them. If all you did was sell used items for less than you paid for them, you don't have to report the 1099-K as taxable income. However, if you are audited, the IRS will consider all your income taxable unless you can prove otherwise. You would need (at a minimum) a list of the items you sold, with your best guess as to when you bought the item, how much you paid, a description, the selling date and the selling price.
You can either leave the income off your tax return, or add the 1099 in the "other income" section and then add a negative item of other income (minus $4900) to cancel it out with the reason "used items sold for less than cost" or something. Or, leave the 1099 off entirely, print your return and file by mail, and attach a copy of the 1099-K and a written explanation of why the money is not taxable (don't include the detailed proof-save that for later if asked.)
