Form 1099-K

[dennishenley]

I'll receive a Form 1099-K from ebay this year. I'm selling personal items and not running a business. I'm way below the Federal minimums this year but I live in Illinois which has less generous minimums.

How do I enter the 1099-K data so that the Feds don't count it as taxable income but Illinois recognizes it correctly? I've read that it's possible to file this under Misc Income, but that would increase the Federal taxes also, right?

Again, I'm not running a business, just cleaning house. I don't think I need to use a Schedule C for this.

Thanks in advance.

[HelenC12]

You don't have to report personal items that you sold if you sold the items for less than what you originally paid. Please see Do I have to report personal items that I sold? Just keep the 1099-K form with your tax return and any supporting documents from the sale of your personal property. 

[dennishenley]

Some items were sold for more than the purchase price while others sold for less. I can easily figure out the net profit. But how would I enter that in TurboTax if the 199-K has a much larger amount than the net profit?

[LeonardS]

Yes, you may not be running a business and just cleaning the house.  However,  the IRS considers your sales activities on eBay as a business due to the fact that you sold items to generate income and the IRS requires that all income be reported.

If the amount reported on your 1099-K was just for paying bills, purchasing items, transferring funds etc. you would be able to report the amount as not subject to income tax.

You will need to file Schedule C Profit or Loss from Business to report the income on your 1099-K and your expenses, to include the cost of the items sold, to figure your net profit.  

To enter your 1099-K on a Schedule C follow these steps:

1. Open your return.
2. Search for schedule c and click the Jump to link in the search results.
3. Answer Yes to Did you have any self-employment income or expenses?
4. Follow the on-screen instructions.
5. On the page titled, Your info, scroll to the bottom and click Looks Good.
6. Click on Form 1099-NEC on the page Let’s enter the income.
7. Click continue.
8. Follow the on-screen instructions.
9. Enter any relevant expenses to your business. 

This link How do I enter a 1099-K in TurboTax Online? has information that you may find helpful.