How to file eBay sales on Turbotax

[muammeraltok]

Hello,

I am an employee so I received a w-2 form from my institution and it is easy to fill for me. But my wife is currently a re-seller and this year (2019) she started to sell some goods on eBay. She is collecting some items from thrift stores and sells on eBay. She sold more than 200 items but the total income according to eBay and PayPal was about $18,000, therefore we haven't received a 1099K form. I need help about filling taxes using Turbotax. I listed my issues and questions below;

1) Can you please explain me the steps to fill this income on Turbotax? Which forms do I need to fill?

2) My main problem is about to showing the cost of this item. I haven't kept all the receipts. But all the purchases were done by credit card and I can see them on the statements. So I exactly know how much I spend for the items in total. Do I really need the receipts? Even I had the receipts, they were mostly not itemized, so I don't know or remember what is the exact cost of each items. Can I fill this way the cost of the items as expenses? 

3) And some of items that we have purchased from thrift stores are not sold yet. Is it okay to fill as for example; in 2019 our income was $18,000, and the money that I spend for the items was $12,000 so my profit was $6000 in 2019?

4) I have some international sales. Do I need to fill taxes for them too?

5) We are filling our taxes together with my wife (spouse), do I need to differentiate anywhere in TurboTax?

Thank you,

[ColeenD3 · Accepted solution]

Yes.

Q1) The income is entered on Schedule C.

2) Since it is your first year and you don't have all your receipts, you will have to calculate the cost the best way you can. Yes, you do need receipts. The best way to deal with the bookkeeping aspect would be to get a credit card or bank account that you use exclusively for the business. You will still need to keep receipts.

3) Since you are not buying and then immediately selling you will need to keep an inventory. Your income is the $18,000 and your purchases are $12,000.

Exception for small business taxpayers.  Inventory Pub 538

If you are a small business taxpayer, you can choose not to keep an inventory, but you must still use a method of accounting for inventory that clearly reflects income. If you choose not to keep an inventory, you won’t be treated as failing to clearly reflect income if your method of accounting for inventory treats inventory as non-incidental material or supplies, or conforms to your financial accounting treatment of inventories. If, however, you choose to keep an inventory, you generally must use an accrual method of accounting and value the inventory each year to determine your cost of goods sold in Part III of Schedule C.

Treating inventory as non-incidental material or supplies. 

If you account for inventories as materials and supplies that are not incidental, you deduct the amounts paid to acquire or produce the inventoriable items treated as materials and supplies in the year in which they are first used or consumed in your operations.

4) No.

5) You will need to indicate that the Schedule C belongs to your wife.

[muammeraltok]

Thank you very much for your responses. They helped very much!