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djlancerevo
Level 1

Garage Sales and Resell Items

I do Garage sales and Resell new items at the same time     these year about little over $2500 made by people sending through Zelle  

Would that effect my taxes?   do i have to report it?  im sure i will be getting a 1099-K from Zelle 

 

Thank You!

3 Replies
John-H2021
Employee Tax Expert

Garage Sales and Resell Items

Hello 

There are 2 ways to report the income.

1. If it is a hobby then the income is reported on schedule 1 for the full amount of the 1099 no expenses allowed to be taken

2. If it is a business the it would be reported on a schedule C (self employed income). You would report the 1099 as income and then deduct the expenses you have againist making that income.

 

Here are a few helpful links

https://turbotax.intuit.com/tax-tips/small-business-taxes/when-the-irs-classifies-your-business-as-a...

https://turbotax.intuit.com/tax-tips/self-employment-taxes/4-tax-tips-for-money-making-hobbies/L89qz...

https://turbotax.intuit.com/tax-tips/self-employment-taxes/beginners-tax-guide-for-the-self-employed...

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mgjr73
Level 2

Garage Sales and Resell Items

A lot of ebay sellers are just selling old stuff and don't consider it a business, hence falls under "hobby" as you described it. Selling on ebay has fees and shipping costs involved. So if we get a 1099K report with $2000 gross but in reality only netted $1500, how do we account for that on our tax forms if we are not allowed to deduct expenses?

John-H2021
Employee Tax Expert

Garage Sales and Resell Items

Before 2018 you were able to write off the expenses on schedule A but from 2018 forward you can't deduct any expenses and pay tax on the gross amount

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