1099-k Questions

[JohnnyC1]

I received a 1099-K from ebay sales in 2022. The gross sales are $3890. I live in NJ. I read the minimum reporting threshold is $20,000 and less than 200 items. Do I still need to report this income? If so, that is gross income so I can deduct ebay fees, correct? 

Thanks!

[KrisD15]

Yes and Yes. 

The IRS wanted reporting for 600 and over, but decided to postpone that until next year. 

1) If this is your business, enter it as income for Schedule C. 

You may then enter expenses, such as ebay fees. 

(you shop garage sales and re-sell on ebay to make a business profit)

2) If this was just housekeeping (selling used items for less than what you paid) you can enter it as a "Personal item" sale and follow the prompts.  

You cannot claim a loss on the sale of Personal Property.

Income

Other Common Income

Income from Form 1099-K

Select "Personal items"

Once that is completed, move to 

Investment Income

Stocks, Mutual Funds Other

The ebay 1099-k will be listed 

Select Edit for that 1099-K

Enter your cost basis (up to the amount of the sales proceeds) 

Select Long-term if you owned the item for more than one year. 

This will basically zero out the 1099-k

Again, this second procedure is for personal sales with no motive for profit. 

[JohnnyC1]

Thanks for the quick response. 
I have a full time job, this is a side gig selling mostly used books. I guess it’s considered a business then. 
I thought maybe I didn’t have to report it because of the hold on the $600 or over.

wishful thinking I guess.

[KrisD15]

Ebay was more prepared than others and had the 1099-K issued before the IRS said it was not necessary for 2022. 

You might consider a home office and vehicle expenses if you need to claim as Self-Employed. 

[JohnnyC1]

Thanks. I may just do “hobby income” this year and not deal with the added work of Schedule C. Then see how it goes this year. 

[JamesG1]

New Jersey has a lower threshold for 1099-K reporting.

Even though the IRS delayed implementing the lower threshold for Federal 1099-K reporting, some states still have lower reporting thresholds for 1099-K's.  So, if someone lives in or does business in one of these states, they may be getting and dealing with 1099-K entries.

AR     $2,500

DC     $600

IL       $600

MD   $600

MS    $600

NJ     $1,000

RI      $100

VT     $600

VA    $600

@JohnnyC1 

[tpc1]

Yes, all Income must be reported.  Especially if you receive a 1099 as the gov cross checks this income against your tax return.   Yes, you can deduct the ebay fee along with most other expenses associated with this business.