Entering 1099k from eBay as business for the first time

[bcqa33]

So my situation is this, I have a full-time job but on the side, I re-sell things on eBay, and last year I was over the threshold and I got a 1099-K for the first time.  I'm considering reporting that as a self-employment business since I think you can deduct the actual expenses from eBay shipping etc. which you cannot for hobby income.  Is there any requirement for you to file the income as a self-employment business?  do I need to have a business license or anything like that to qualify?

To enter the income as a self-employment business on TurboTax (Home & Business edition), do I just go to Business Tab -> Business, Income and Expenses -> Business Income -> General Income -> and just add an entry for 1099-K?  Then all expenses can go under Business Expenses, eBay fees under Advertising, shipping under Other Misc Expenses, and cost of goods under Supplies since I don't have any inventory?  

Also, I assume my business is a qualified business income since I didn't get the eBay income as a wage?

Thanks! 

[DawnC · Accepted solution]

Generally, if you are trying to earn a profit, it is an attempt to earn money and is self-employment (SE).    If your business claims a net loss for too many years or fails to meet other requirements, the IRS may classify it as a hobby, which would prevent you from claiming a loss related to the business.  If the IRS classifies your business as a hobby, you'll have to prove that you had a valid profit motive if you want to claim those deductions.   You do not need a license for tax purposes - see the link above to see the difference between ''hobby'' and SE income.  

Yes, you are entering your income and expense items in the correct spot.   Use the General (Desktop version) or Other Self-Employment Income (Online version).  The 1099-K doesn't have its own spot like the 1099-misc or 1099-NEC.   And yes, all business expenses go to their category in Other Common Business Expenses except - except for vehicle expenses - those have their own section just above the Other Common Business Expenses section.    And you can use Supplies Expense for inventory purchases assuming your average sales are less than $26 million averaged over 3 years - See this FAQ re: reporting inventory.  

And yes, your business is probably considered a qualified business for the qualified business income deduction (QBID) - See this FAQ.