eBay 1099-K and Taxes for Resellers: What You Need to Know

Every January, eBay sellers search for "1099-K" with some anxiety. The form shows a big number, and it's tempting to assume that's what you'll be taxed on. It isn't. This guide explains what the 1099-K is, how it relates to your actual taxable income, and the records you should keep all year. It's written for US sellers and is general information — tax rules change and individual situations differ, so confirm with the IRS or a qualified tax professional.

What is a 1099-K from eBay?

Form 1099-K is an information return that payment platforms send to sellers and to the IRS. It reports the gross amount of payments processed for you during the year. For eBay sellers, that gross amount generally reflects the total buyers paid — including shipping you charged — before eBay's fees, refunds, or your costs are subtracted.

The threshold at which platforms must issue a 1099-K has changed several times in recent years through IRS guidance and legislation, and some states have their own lower thresholds. Check eBay's tax documentation and the IRS's current 1099-K page for the threshold that applies to the tax year you're filing. Remember: the threshold controls whether you get a form, not whether income is taxable.

Is the 1099-K amount my taxable income?

No. Your taxable income from reselling is roughly:

Example: Your 1099-K shows $40,000. Refunds were $1,200, COGS $14,000, eBay and ad fees $6,100, shipping labels $5,300, and supplies, mileage, and subscriptions $2,400. Your net profit is about $11,000 — less than a third of the form's number.

That's why accurate cost of goods tracking is so important: without records, you may have trouble supporting your deductions.

Do I pay tax on personal items I sold on eBay?

Generally, if you sell personal items (your old couch, clothes, a used phone) for less than you originally paid, there's no taxable gain. If you sell something for more than you paid — a collectible that went up in value, for instance — the gain is generally taxable.

If you receive a 1099-K that includes personal-item sales at a loss, the IRS provides ways to report that so you're not taxed on it. Keep receipts or reasonable evidence of what you paid.

Is eBay selling a hobby or a business?

If you buy items with the intention of reselling them for profit and do it regularly, the IRS will generally view it as a business, reported on Schedule C, which lets you deduct business expenses — and may also subject your net earnings to self-employment tax. Occasional sales of personal belongings usually aren't a business. The distinction affects which expenses you can deduct, so it's worth discussing with a tax professional if you're unsure.

What records should eBay resellers keep?

• Receipts or a purchase log for inventory (date, source, cost)
• eBay transaction reports and annual tax summaries
• Shipping label receipts, including labels bought outside eBay
• Supply purchases (boxes, mailers, tape, printer, scale)
• Mileage logs for sourcing trips
• Subscriptions (eBay store, software)
• Year-end inventory count and value

A monthly profit and loss statement turns these records into numbers your accountant can use directly.

What about sales tax?

Income tax and sales tax are separate. eBay collects and remits sales tax on most US orders as a marketplace facilitator, so most sellers don't file sales tax returns for eBay sales. Our guide to sales tax on eBay covers the details and exceptions.

How can software help at tax time?

MyOrderProfit generates monthly and yearly profit and loss statements from your synced orders — gross sales, eBay fees, shipping, item costs, and net profit — and exports everything to CSV. It also tracks tax collected versus tax remitted on your orders. Hand that to your accountant along with your expense receipts, and tax prep becomes a review instead of a reconstruction project.