I read posts for an hour, I still can't figure out how to enter eBay/Paypal 1099K in Turbotax

[klemenid12]

The title says it all. I read posts for an hour and I still can't figure out how to enter eBay/Paypal 1099K in Turbotax. When I click on "Other Common Income" it redirects me to self-employed. I only sold some old gear on eBay and via Facebook (using Paypal) and made no money. Which exact option do I need to use to report this? I don't want to do self-employed, I'm not running a business and I didn't make money off this. Thank you for any advise!

[ejscharlotte]

Under Misc and other Common Income there is a tab for 1099-K income. Have your tried that? If that doesn't work, see if there is a option for Less Common Income.  Sorry, best I can do

[klemenid12]

I did and when you click on "did you receive payment" it redirects you to do self-employed taxes. But that shouldn't be the case, I sold misc items, not running a business.

[fanfare]

 what line on the K-1 has your proceeds ??

[klemenid12]

It's 1099K. It just shows amount of transactions in 1a

[fanfare]

@klemenid12 

1099-K must be reported on Schedule C.

You are a sole proprietor and your business name is your own <taxpayer> name,

which you leave blank.

[DanP0428]

Federal 
Income and Expenses

Other Common Income

[JamesG1]

Are you reporting a Schedule C on your 2021 Federal tax return?  If so,

• Go to Federal / Income & Expenses / Your income and expenses / Self-employment / Self-employment income and expenses.
• Click Start / Edit / Add to the right.
• At the screen Here's your business info, scroll down and click on Add income for this work.
• Click Other self-employed income includes 1099-K...
• Click Add another row,
• Under Type of income enter 1099-K, under Amount enter the value in box 1a.

Do you have costs of sale to report to offset the 1099-K income?  What is the nature of the costs of sale?

@klemenid12

[klemenid12]

Thank you! I'm just confused why I have to file as self employed. It's just selling a few old items like a used book, used bike parts, etc. for way less than what I bought them. The total number of items was 7 over the full year and they are random, it's definitely not my business or even a hobby.

[MinhT1]

If you receive forms 1099-K for selling old books and personal items on Ebay/Paypal, you most probably sold these books for less than you paid for them. You have made a loss on personal items. This loss on personal items is not deductible and is not reported on your tax return.

If this is the case, you do not need to report these forms 1099-K on your tax return. Just keep them in your tax records along with any proof that it was for the sale of old books/personal items.

Please read this TurboTax Help topic for more information.

[DanP0428]

I believe that this is the best answer for your situation. Just don't report it.  

You are correct that this is not self-employment.  You are simply one of the first to get a 1099K from Paypal for sales that are less than the intended threshold.

The IRS requires each payment settlement entity to send you a Form 1099-K by January 31 if it has processed at least $20,000 worth of payments and at least 200 transactions for you in the previous year.

Due to recent changes in the law, payment apps like Paypal will be sending these 1099-K's to millions of people like you who did not do $20,000 worth of transactions. The new threshold is $600 and that is completely ridiculous.  I predict that this law will be changed before 2022 taxes are due.

Just keep the 1099-K with your tax records.  And make sure you cheer the tax expert who told you not to file it.  That is excellent advice.

[ColeenD3 · Accepted solution]

While not reporting it is one approach, you will probably be contacted by the IRS for unreported income. That's no fun.

It is better to report it and back it out if you had no profit and you sold old things lying around the house. Please see this answer from PattiF.

This can be reported as the sale of items not associated with a business so this won't be considered as self-employment income

In order to do that you can either report it as investment income or other miscellaneous income. Make sure to include expenses of the sales and the original cost of the items.

For reporting Form 1009-K for personal items sold not associated with a trade or business, you can report this as Miscellaneous income.

• From the left menu, go to Federal and select the first tab, Wages & Income
• Add more income by scrolling down to the last option, Less Common Income, and Show more
• Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
• Choose the last option, Other reportable income and Start and Yes
• Enter the applicable description and amount and Continue
  • First, enter Form 1099-K as received. It is essential that the full amount be entered.
  • Next, enter an adjustment as a negative number to reflect the cost of these items and the sales expenses  (but not more than the sales price. You can't produce a loss.)

[cnmbeaudry]

Thanks for this guidance! This has been super frustrating trying to figure out how to report a few dollars of sales over the course of last year. This year it all goes to the thrift store as a charitable donation instead.

[klemenid12]

Thank you so much for the guidance! Really appreciate the help.

[Pebbles2]

Colleen D's answer ("Next, enter an adjustment as a negative number to reflect the cost of these items and the sales expenses" makes sense except I see no way to enter an adjustment! And if I try to enter the adjustment on Forms, Schedule 1 links me to the 1040 worksheet, and TT won't let me enter an adjustment on Line 24z without doing an override.  I sold items on eBay after my 99 year old father moved to a retirement facility. I don't have original costs but am sure they sold for less than original price. eBay sent a 1099K, and I need to adjust for that, but don't see how to do so without the override.