Won't receive 1099-K because I don't reach the threshold. How do I enter my info?

According the Internal Revenue Code, even if you do not receive an tax document, a US citizen is subject to tax on worldwide income from all sources and must report all taxable income and pay taxes.

 

I would report the income as personal item sales rather than as self employment income,  See the steps below to report the income in TurboTax Online.

 

Personal items sold for less than their basis (most likely, the original purchase price) report $0 capital gain on line 7 of the Federal 1040 tax return.

 

Personal items sold for more than their basis report the gain on line 7 of the Federal 1040 tax return.  See this example.

 

                              Selling             Cost

                              Price                Basis

 

Couch                    $500              $2,000        Capital loss on personal item = $0 loss

Jewelry                  $400               $300           Capital gain on personal item = $100 gain

Chair                     $100               $100            No capital gain or loss

 

                              $1,000           $2,400

 

 

 

 

 

Schedule D will report a $100 long term capital gain.

Federal 1040 tax return line 7 reports $100 long term capital gain. 

 

To report Personal item sales in TurboTax Online, follow these directions.

 

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Click Show more to the right of Other Common Income.
• Under Your income and expenses, click the Edit/Add button to the right of Form 1099-K.
• At the screen Did you get a 1099-K? click Yes.
• At the screen How would you like to enter your 1099-K? click Type it in myself.  Click Continue.
• At the screen Choose which type of income your 1099-K is for, select the button for Personal item sales.  Click Continue.
• At the screen Let’s get the info from your 1099-K, enter the information.      Click Continue.
• At the screen Personal Item Sales, you are told that further information will need to be entered.  Learn More provides detailed information for the next steps.  Click Continue.
• At the screen Your 1099-K summary, notice that the income relates to ‘Sale of Personal Items’.  Click Done.
• Under Your income and expenses, click the Edit/Add button to the right of Investments and Savings (1099-B, 1099-K….)
• At this screen, you will be asked to Review the Personal item sales (1099-K).
• At the screen Now, enter one sale…., answer questions about the personal item sale.  Click Continue.

 

Selling expenses will be reported at the screen Let us know if any of these situations apply to this sale when entering the detail to the IRS form 8949. Select I paid sales expenses that aren't included in the sale proceeds reported on the form. 

 

The entry will be reported:

 

• on Schedule D of the Federal 1040 tax return, and 
• on line 7 of the Federal 1040 tax return.

 

Capital loss for a personal item sale reports $0 capital gain on line 7 of the Federal 1040 tax return.

 

Make sure that you retain any information about the items sold should you be required to demonstrate to the IRS that this is not taxable income.

Since I didn't get a 1099-K, on the part where I enter the info manually, can I leave the part about who issued it and their federal ID # blank and just put the gross amount paid (since I only know that)?

If you did not receive a 1099K, then you would skip the 1099-K entries and just go directly to the investment section.

 

You would enter the your income by clicking the following:

• Federal
• Income
• Show More next to Investment Income
• Start next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B) 
• Select Other
• Continue through and select Personal  for the type of investment
• Answer how you received the items
• Then you can enter the selling price, dates and the cost basis for the items you sold. 

Can I group it all the transactions together when entering the proceeds and total amount paid? I sold like 80 items, seems like a lot to enter. If so, what would I put for the "Date sold or disposed" part if I sold items on different dates? It's requiring a date.

You can group it together by category by selecting I'll enter a summary for each sales category instead of choosing individual sales. 

 

When you group the sales together TurboTax does not ask for a sales date, however, you would then be required to mail in a paper statement with more detail describing the sale.