If you receive a 1099-K from ebay, but you did not make much of a profit on the things sold, how do you account for that on your schedule C?

[SantinoD]

Income reported on 1099-K is considered Self-employment income reported on Schedule C.  You can also claim expenses that were incurred for the activities from that self-employment income. This will help lower your taxable (net profit) self-employment income. You will need our TurboTax Self-Employed package in order to claim those expenses as deductions.

To enter your 1099-K as self-employment income, follow these steps:

1. Open or continue your return and select Search
2. Search for Schedule C and select the Jump to schedule c
3. Answer the questions about your business until you get to the Here's your info screen. Select Add income for this work
   1. If you’re returning to Schedule C, select Review or Edit next to your work and then answer the questions about your business
4. On the Let's enter the income for your work screen, select Other self-employed income and Continue
5. On the Tell us about other self-employed income for your work screen, enter your 1099-K info
6. Select Continue when finished

To learn about what expenses you can deduct from that self-employment income, go here: What self-employed expenses can I deduct?

[danielle-51]

So if you received $20,000 in payments from Ebay, but you paid $15,000 for the things which you sold for $20,000, are you still going to pay taxes on the $20,000 or is there a way to account for what you had to pay for those items? How do you record what you paid on schedule C?

[ErnieS0 · Accepted solution]

Yes, you can account for the cost of the items you sold, along with expenses of sale, such as packaging materials, shipping costs, travel to the post office, a portion of your internet bill, etc.

1. Type sch c in Search (magnifying glass) in the top right
2. Tap Jump to sch c
3. Complete the info screen
4. TurboTax will show you a list of recommended expenses based on your type of business
5. If you don’t see Inventory, tap Less Common Items and keep paging through until you find Inventory, then Continue
6. Start Inventory
7. If you sell the same types of items, enter the value of your beginning and ending inventory.
8. Otherwise, skip and go to “Let’s get the cost of goods for your [business] work"
9. Enter your products under Cost of Purchases
10. Enter Materials and Supplies and Other Costs to Prepare for Sales, if applicable
11. Enter your other expenses in the appropriate categories

[danielle-51]

Thank you, I appreciate your help. It's so good to get answers when you need them!