1099k from ebay

[ltw1sm2]

I received a 1099k from ebay for $2900 way under the federal minimum of $20,000 but my state mandate is$1,000. do i only have to claim on State taxes?

Michelle

[HelenC12 · Accepted solution]

No, you have to claim the income on your federal and state income tax returns. The IRS requires that you report all of your income if you're required to file a tax return.

• See Do I need to file a federal return this year? 
• The $2,900 1099-K may be considered self-employed income.
• We'll automatically complete Schedule C when you set up your self-employment work in TurboTax or when you enter what the IRS considers self-employment income.

Additional information: How do I enter a 1099-K in TurboTax Online?

[shuren]

Ho to put the expense for 1099-k eBay?

[LeonardS]

Follow these steps to enter your eBay 1099-K and expenses for the items sold.

1. Sign in to TurboTax and open (continue) your return
2. Select Federal from the left menu
3. In Wages & Income (Income & Expenses if you’re using TurboTax Self-Employed), scroll down to Less Common Income and select Show more
4. Select Start next to Miscellaneous Income, 1099-A, 1099-C
5. Select Start next to Hobby income and expenses
6. Answer Yes to Do you have hobby income or expenses?
7. On the next screen, enter the Total income reported on your Form 1099-K and select Continue. Don't enter any expenses.
8. Select Done on Love your dedication—here’s what we’ve got for your hobby
9. To deduct the cost of the items sold: while still in Miscellaneous Income, select Start next to Other reportable income
10. Select Yes on Any Other Taxable Income?
11. On the next screen, enter Form 1099-K in the Description field. Enter the total cost of the items sold in the Amount field as a negative number. Note that the amount can’t exceed the income reported on Form 1099-K.

[shuren]

The instruction is based on "TurboTax Self-Employed" version.

What if I am using TurboTax Premier version? I was only sold 1 item on eBay in 2021, which is an old computer. 

[shuren]

The instruction is based on "TurboTax Self-Employed" version.

What if I am using TurboTax Premier version? I only sold 1 item on eBay in 2021, which is an old computer. 

[DawnC]

Assuming the computer was not ever used as a business asset, you should use the investment sale section to report the sale of personal use items.    See instructions below.   

Most of the time, personally-owned things decrease in value after the initial purchase. If you later sell them, it's almost always for less than what you paid, so there's no gain to report, and the IRS does not allow taxpayers to deduct losses on personal items.

But what if you do have a gain OR you received a 1099-K because you sold the items online?   You should report these transactions as investment sales as capital transactions.    Choose your product for instructions.

TurboTax Online

1. Open (continue) your return in TurboTax.
2. In the search box, search for investment sales then select the Jump to investment sales link in the search results.
3. Answer Yes to the question Did you sell any of these investments in 2021?
4. If you land on the Investment Sales Summary screen, select Add More Sales.
5. Select Other, then Continue.
6. On the Tell us more about this sale screen, enter your name or the issuer’s name if you received a 1099-K.
7. On the next screen, change the type of sale to Personal Items and Continue.  The type of sale is indicated in the first box on the Now, enter the sale screen.
8. Continue following the onscreen instructions to enter the sale.

To ensure your tax return is complete and correct, do not skip step 7.   

TurboTax Desktop

1. Open (continue) your return in TurboTax.
2. In the search box, search for investment sales then select the Jump to investment sales link in the search results.
3. Answer Yes to the question Did you sell any of these investments in 2021?
4. If you land on the Investment Sales Summary screen, select Add More Sales.
5. Answer NO to the Did you get a 1099-B for this sale? question.  
6. Select the first option, I’ll enter one sale at a time.
7. Enter the details about the item you sold and Continue.  
8. Click Continue on the less common items screen.  
9. Answer NO to Was this a sale of employee stock? 
10. On the next screen, less common adjustments, mark the box next to Any loss from this sale is not deductible.  Then choose personal use property from the drop-down menu.   This will ensure you don't take a loss and overstate your tax deductions.   

TurboTax will calculate the holding period.   Do NOT skip the last step.  @shuren

Related Information:

• Do I have to report personal items I sold?
• What is the definition of cost basis?

[ncage]

@DawnC the following steps do not work:

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@DawnC wrote:

TurboTax Online

1. Open (continue) your return in TurboTax.
2. In the search box, search for investment sales then select the Jump to investment sales link in the search results.
3. Answer Yes to the question Did you sell any of these investments in 2021?
4. If you land on the Investment Sales Summary screen, select Add More Sales.
5. Select Other, then Continue.
6. On the Tell us more about this sale screen, enter your name or the issuer’s name if you received a 1099-K.
7. On the next screen, change the type of sale to Personal Items and Continue.  The type of sale is indicated in the first box on the Now, enter the sale screen.
8. Continue following the onscreen instructions to enter the sale.

To ensure your tax return is complete and correct, do not skip step 7.   

---

I'm using the premier version of TurboTax online. As soon as I click on the "Investment Sales" link i'm brought to the following page:

There is no "Add More Sales" button. Only an "Add Investment" button. If you click the "Add Investment" button it wants you to connect to your broker even if you go forward without connecting it's nowhere near what you stated in your instructions. You can see in my screenshot towards the upper right exactly the link i clicked. I didn't want to make the screenshot any lower because it would then expose my personal info.

Furthermore Your & @LeonardS instructions are totally different. I, like a lot of people, just sell used stuff on ebay that I always am stelling for less than what i bought it for. So what should it be?

[LeonardS]

If you are selling items that are considered collectibles then you would report the sale as investments and follow the steps by  @DawnC 

Collectibles are considered alternative investments by the IRS and include things like art, stamps & coins, cards & comics, rare items, antiques, Etc.

If the items are not collectibles, just stuff selling for less than you brought it for, then you would use the steps provided by @LeonardS.

How you report the sales is dependent on the type of items sold.

@ncage

[fmr]

---

@LeonardS wrote:

Follow these steps to enter your eBay 1099-K and expenses for the items sold.

1. Sign in to TurboTax and open (continue) your return
2. Select Federal from the left menu
3. In Wages & Income (Income & Expenses if you’re using TurboTax Self-Employed), scroll down to Less Common Income and select Show more
4. Select Start next to Miscellaneous Income, 1099-A, 1099-C
5. Select Start next to Hobby income and expenses
6. Answer Yes to Do you have hobby income or expenses?
7. On the next screen, enter the Total income reported on your Form 1099-K and select Continue. Don't enter any expenses.
8. Select Done on Love your dedication—here’s what we’ve got for your hobby
9. To deduct the cost of the items sold: while still in Miscellaneous Income, select Start next to Other reportable income
10. Select Yes on Any Other Taxable Income?
11. On the next screen, enter Form 1099-K in the Description field. Enter the total cost of the items sold in the Amount field as a negative number. Note that the amount can’t exceed the income reported on Form 1099-K.

---

@LeonardS, TurboTax own website says otherwise:

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Beginning in 2018, the IRS doesn't allow you to deduct hobby expenses from hobby income. you must claim all hobby income and are not permitted to reduce that income by any expenses.

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

[LeonardS]

Yes, you can not deduct hobby expenses however, you are allowed to deduct the cost of goods sold.  That is what the post describes deducting the cost of goods sold which are not considered to be an expense by the IRS. @fmr

[bvink123]

Something must have changed from last year as these instructions do not help. 
When I enter my 1099-K from ebay there is no option to enter expenses against that. If I enter my expenses in another category as a home retail business (hobby) it doesn't allow me to take a home office deduction because my revenue isn't high enough since it is entered separately as a 1099K.  
Help Please!!

[brennele]

You are required to report all of your income.  The mandates for ebay as to whom they need issue any given form - in this case a 1099 - does not absolve you from any requirement to report your income and pay appropriate taxes on that income.  It sounds as though that income is self-employment income hence you may need to pay self-employment tax.  If you simply sold an item and that was your profit then you would not necessarily be self-employed.  It might be a one-time transaction.  If you repeatedly sell items on ebay and that figure represents the total of what your earned for y our efforts, then,  you would be self-employed.  Either way, the amount should be reported as income

[JamesG1]

When you report income from an IRS form 1099-K, TurboTax gives you several options as you see here.

Hobby income allows you to report the income but current tax law gives you no opportunity to report the expense against the hobby income.

Personal item sales will allow you to report the income and expense on IRS form 8949 / Schedule D Capital Gains and Losses.

A home office deduction may be allowed against self-employment income.

To report Hobby income, 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 Hobby income.  Click Continue.
• At the screen Let’s get the info from your 1099-K, enter the information.      Click Continue.
• At the screen Your 1099-K summary, notice that the income relates to ‘Hobby’.  Click Done.

The entry will be reported:

• on line 8j of Schedule 1 of the Federal 1040 tax return, and 
• on line 8 of the Federal 1040 tax return.

Hobby income expense is not allowed to be reported.

To report Personal item sales, 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.

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.

@bvink123 

[jerod_33]

If I sold mostly baseball cards that I bought and sold with intentions of making profit, which option would be best for my 1099-k I received from ebay? However a lot of these items and overall amount ended up being a profit loss on the year. I thought it may be a good idea and turns out I was wrong. Now I'm not sure what to do with the tax situation. Thanks.