1099-k

[Anonymous]

Hi, I’m not paying the $29, I’m gonna start here and ask around, but does it really matter if the money from a 1099K is said to go in the self-employed section or can I put in other income? Aside, The IRS doesn’t care if someone has a business bank account or just a bank account as long as money is recorded, may not be best analogy.  I do not own a business, but sold on eBay

[ColeenD3]

Yes, it absolutely matters. In brief, if you sold old items you had laying around your house and made no profit, that is other income.

If you purchased items for resale with the intention of making money, you have a business.

[Anonymous]

in the middle of your two examples, I sold stuff that I own which so happen to be like $5000 in 2021. I don’t have a registered or any type of business structure. 

[AliciaP1]

The 1st situation @ColeenD3 posted fits your statement.   If you made a profit on the sale of the items (which means your original cost was less than the $5,000 you sold it for) you report the 1099-K as Other Income.  If you sold the items for a loss, you cannot take the loss as a deduction.

You can do this in TurboTax Online by following these steps:

1. Within your tax return click on Income & Expenses at the top of the screen
2. Scroll down to Other Common Income and click Show more
3. Click Start next to Form 1099-K and enter the amount of net amount of income you received (after deducting the cost of the items and the fees from your payment processor)

[Anonymous]

Hi, so I can list it as other income. I need to get this straight…the $5000 I received is net after eBay’s and PayPal’s/processing fees.
I did not deduct cost of items that were part of the $5000 net. Do you mean if something I owned cost $3 I can deduct that from the net $5000? 

[LeonardS]

The "net" you received from eBay includes your cost of the item and any fees you charged the buyer for shipping/handling of the item(s) you sold.  Your cost and the shipping/handling fees can be deducted as an expense from the "net" you received from eBay.  

@FunpoppyJ

[Anonymous]

Choosing other common income and form 1099 – K loops me back to wages and income. I wonder if under less common income and miscellaneous income is also acceptable regarding eBay (PayPal), then I wonder if it would count as hobby income and expenses Or other reportable income? The previous year I only made $770 from Ebay (PayPal). 

[ColeenD3]

Having a business structure is irrelevant. You are earning money to whatever degree by selling items for profit. This seems like more than a hobby or just getting rid of stuff around the house. You've been doing this since 2020.

It is ultimately up to you how you wish to declare this but be prepared for the IRS to question it. If answering the questions in the program is looping you back to SE, maybe that's how you should be reporting the income.