If you sell goods (including used or new clothing), and do so with the intention of making a profit
(in other words you are not a casual reseller of used personal goods or other items that you may already own or have worn, then
this is considered a self-employment activity by the IRS.
And unless you are incorporated as business, or are in a partnership
arrangement with one or more other persons, you will need to file a
Form 1040 Schedule C (and Schedule SE) to report this self-employment
sales activities, as well as to deduct valid
cost-of-doing-business expenses . . . such as cost of goods sold
inventory, postage, Amazon commissions and fees, etc.
In TurboTax, you would need to use either the (online) Self-Employment edition of
the program, or you would want to use the (desktop) Home & Business
edition, to complete these tax forms.
Here are some TurboTax webpages that can help with more information:
https://ttlc.intuit.com/questions/1901340-what-is-schedule-c
https://turbotax.intuit.com/tax-tools/tax-tips/Self-Employment-Taxes/Reporting-Self-Employment-Busin...
So, basically, what you will want to do is create a Schedule C
(and Schedule SE) in the tax software and report your self-employment
sales. Even if you experienced a net loss from your used clothing activities, rather than a profit, the
only way to take that loss as a tax deduction on your return is to fill
out a Schedule C (from which the information then "flows" back onto your
main Form 1040).
TurboTax automatically creates Schedule C (or Schedule C-EZ) and SE when you enter your business information, or when you enter the section of the program that asks about self-employment income.
If you have further
questions, encounter any software difficulties, or just want to speak with a live tax
expert who can walk you through any Schedule C (business related) TurboTax entries, including the ability to
screen-share with your computer, please feel free to contact us. We
would be happy to help you. As a paying TurboTax customer, the call is free to
you. Here is a link where you can create a support ticket and reach us:
https://support.turbotax.intuit.com/contact/
Thank you for asking this important question.
