Yep. I regularly buy stuff off Ebay in the $75-150 range and flip it for $200-500 on Amazon. I've been doing that for 17 years, back to when Amazon had the z-shops. When I started, I was often the only marketplace seller of most of my items on Amazon. You either bought from Amazon directly or me if you wanted a third party seller.

However, other than the money, Amazon is far worse as a seller than Ebay. You have to walk on eggshells at all times. I had a DVD listing shut down last night because somebody returned one of them saying it didn't play. I received it back and the only thing wrong with it was a huge thumbprint from the buyer mishandling it. This is a factory sealed title I'd sold 500+ of since 2012 for $17 each and now one buyer that doesn't know how to handle a DVD got the listing pulled. I have to provide a plan of action for how I'm going to keep that from happening again and hope the support person reading it that day is competent in their job.

Email from eBay
They can stick it!

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They shut me off. Guess I’m done.

I threw a few rare Box Sets up at Hail Mary pricing...just to see if I could sneak them in before the deadline with a min. of harassment.

Got them listed, but can't do anything to edit them or any other listing I have up. Which is bullshit. Some of those listings are nearly a year old and this was not the arrangement I made with eBay when I put them up.

Facebook Marketplace. Please. The ULTIMATE Trojan Horse. The search function is garbage for a reason. They are data mining you and using it to both sell to you directly via ads and to create consumer profiles that they sell to third parties. This is not my tin hat conspiracy. I know someone who works there and his department does exactly that.

Facebook was a data collection scam from day one.

22 year eBay seller here and I have no idea what to do now....

First let me just say, does eBay suck? Yes.... Yes it does.... unfortunately it's also the best.
I sell tons of small items, from arcade parts to toys to electronic parts.... really anything.
I sell about 100 to 200 items a year, and my best year I sold just short of $10K ($9,951).
When my wife was out of work in the mid 2000's selling on eBay kept us above water.... now with covid issues I find myself in a very similar situation.
Facebook Market Place is a joke, the search is terrible, and I'm not meeting people to sell a $20 item.
Craigslist is about the same in my opinion.... and really dead.
Facebook and Craigslist are great to sell big, hard to ship items like machines.
For all of eBay's issues and how awful they treat sellers, they still give your items the biggest worldwide audience for selling, and while I have my share of horror stories, out of 3000+ items sold, maybe 5 of those were bad. Compare that to trying to sell things on Facebook and craigslist and how many times the buyers have been no-shows or hard to deal with, eBay is the only way to go.
Over the years I've heard so many people say "This is the end for eBay!" Like when they said no checks, money orders, or cash, PayPal only.... I saw a small dip in sales for like a year, and then everything went back to normal (if not better).

So now my problem is this whole 1099 thing. Since I live in Taxachusetts I get a 1099 if I sell over $600. I have absolutely no idea what to do with this, and no idea where to go to learn it (I basically fumble my way through TurboTax every year). I have no problem paying my fair share of taxes, but that's just it... I'm only willing to pay my fair share. So lets take my $10K year for example.... I sold 10K of items, I bought some of those items to re-sell.... then I bought shipping supplies.... shipping was built into the price, so I made no money on shipping. By the time all is said and done, I really only made a profit of $5K. I do not want to pay taxes on the 5K that were what I consider operating expenses.
What do I do? become a small business? Do I take a small business class? Or do I just not worry about the whole thing and just not report it? I really have no idea what to do, and selling on eBay has been a real life line for me and my family.

If the tax is due by law, you have no choice. Taxes aren't the "great evil" in the world, they go to fund necessities and now to fight climate change.

I'm in the same boat, but have no choice and will be paying more in taxes. Won't lose sleep over it.

Red Five - Yes you need to report all income from a 1099.

Based on the activity you describe, you do not need to create a business entity. But you will need to upgrade your turbo tax license to the small business edition, that has support for 1099s.

Every dollar you spend for supplies or resale goods can be netted out against the gross 1099 income. Just create a simple spreadsheet that subtotals your spending categories - what you spent purchasing the goods, what you spent to package, ship, repair, etc. Basically anything you spent is deductible, even your monthly internet bill, however your time is not deductible. Turbo tax prompts you for much of this and it is pretty self-explanatory once you go through it a couple of times.

The 1099 section will net out the income and costs, so you will be able to see the total. If it isn't close to the 5,000 you think it is, go back and double check your costs by category and correct them.

There are lots of other 'tricks' people use to reduce the taxable income, but given the simple business model you have, you should keep your return simple too.

If you are uncomfortable with this, you should get some tax help, even a walk in tax place and they can walk you through it. But the first thing they are going to ask for is the spreadsheet data I mentioned. So if you can assemble that, then most of the work is done anyway.

GL!

Keep a spreadsheet of every penny you spend and every penny you receive. Make different columns for different categories like inventory, fees, shipping supplies, postage, etc. Those can go in different buckets in TurboTax. The difference in what you spend and what you receive is your profit and that's what you pay taxes on.

I can not stress this enough:
SAVE ALL YOUR RECIEPTS.

If you get audited, they will demand to see them. If you do not have them, they will fine you and then add past-interest due on taxes owed, and depending on what they get you for, it could be a life-breaker.

While I'm not a seller on ebay, one of my jobs wants to convert me to a 1099, and I literally just spent earlier this week talking to a tax guy to figure out how to handle it, and this was one of his biggest sticking points.

Thank you so much @Black_Knight, @loneacer, and Coyote this is the help I've been looking for!

My wife had a small sprint as a real-estate agent about ten years ago, and when tax time came it was a mess (using turbo-tax).... I'm just now realizing that I probably should have been using Turbotax small business edition instead of just the deluxe.

I never said that taxes were evil or I didn't want to pay them, I just don't feel it's right paying taxes on $10k when in all actuality I only made 5k in profits. I will happily pay taxes on the 5K I made and hope it actually does help fight climate change

What do you do if you are buying used items from private sales to resell? Like maybe I buy $500 worth of parts from an old operator? do I just have them sign a bill of sale? what kind of info needs to be on it?

Anyway... thanks again for all the help... I've been feeling pretty overwhelmed by the whole thing for a while now, but it seems that I may have been using the wrong tools in the past and maybe over thinking things.... I'm glad I found this thread and there are a lot of helpful people here.

~Jeff

This may be a tax-person question. Because in all honesty, the IRS could see you as a retailer doing this, and may expect you to pay and collect sales tax.

This didn't come up in my conversation, since I'm providing a service for the 1099, not selling anything. :/

OK.... Fair enough... thanks for the guidance!

Anyone know what a Tax Person costs? Is that just like H&R Block or a place like that?

~Jeff

I'll second this. If you're buying to resell for a profit, you should have a business license ($25/year in my state) and collect sales tax. The good news is Amazon and Ebay collect and remit tax for you in most states except your own. For buyers in Missouri, I have to collect and pay the sales tax.

See, this is where it gets overwhelming. How does one learn all this? I'm just trying to make ends meet, maybe buy myself a nice game once and a while (witch hasn't happened in at least 5 years)... Collecting Sales Tax is way more work than I think I want to do.

Please read again. We know all of that and agree with you. But used baby clothes/supplies/toys and used furniture are hot and come from locals. I know many millennial and X and they do not even consider eBay any more (being a former Seller I asked them). They consider eBay shady. These are shipped too, not exchanged in a parking lot.
Again, never had an account for many of the reasons you mentioned, and only search for pinball machines on the borrowed account. NEVER look at eBay pinball listings.
Also, been successfully selling some rather obscure expensive items on Craigslist. Seems now that a lot of the riff faff no longer use it its much better.

Guys, 1099's are a way of life. Even many W2 employees are being moved to 1099 status contractors. Taxing authorities (local, state, federal) require you to pay your income taxes on any income you collect. W2 employees had it easy: all of that reporting and tax collection was taken care of on the backend. 1099 income is becoming a new norm and basically puts all of that accounting and liability on your shoulders.

So you have to look at the 1099 income MINUS YOUR COSTS! The taxing authorities allow you to deduct the costs of acquiring that income. For W2 employees, they allow you to deduct your business costs, above what your company reimbursed you for (with a 2.5% floor). For stock traders, the 1099 shows EVERY PENNY of what you received when you sold any stock, and in recent years they also show what you PAID for those shares, so you get taxed only on the profits. (which is always how it is intended to work).

In this discussion, EBAY is simply giving you the documentation of what you sold through them, so you could calculate profile/income, which the government has always wanted you to pay income tax on. For Ebay selling, most jurisdictions require 1099s to be issued ANY TIME proceeds exceed $600 which is the documentation you need. A point of clarification: Even when you sold below that amount, income disclosure is still mandatory, and requires you to report it, even if you sold 1 item for $10. That is why tax forms always talk about unreported income and offer you places to disclose that income and pay taxes on it.). BUT HERE IS THE KEY: The 1099 identifies the INCOME only, and YOU must identify the COST to acquire that income. So if you sell 1000 baseball caps for a total of $25000, the $25K will be reported on a 1099. It is then up to you to add up the cost of those caps, the costs of shipping supplies and fees, your time, gasoline to take them to UPS, etc. If all of your costs add up to say, $16000, then your Net-Net income to report is $9000 which you pay taxes on.

It's all a Net-Net scenerio. If you collect income, the only real challenge is to determine how to get documentation and use it to fill out the forms required to show the income minus the costs.

Related note on "eBay" value: I joined ebay in 1996 (25 years ago), and I think they only charged listing fees! No commission. In 2000 commission were introduced and I think the commission fees were down at around 2%. back then. those fees were so small I didn't even think about the costs of using the platform. Now, they run around 10%, which is a numbing amount for a higher priced item. THAT is an interesting discussion, but again, what are your alternative choices? Nothing really...

Ebay sucks.
Ebay has always sucked.

Mention of Ebay is often considered in the pinball world to be the absolute worst platform to deal on.
And this was before these new regs'.

This whole thing is a pain in the arse.

It's far from perfect and has it's flaws however allowed me to make an extra $6000 over the past few months. Say what you want about it but I have sold close to 100K and without eBay I would never have been able to get the amount of exposure I did. I'm not a business and just sell things on the side as a hobby. I don't sell pinball machines on eBay however it helped me acquire many arcade games and parts in the late 90's before places like Pinside existed.

While I don't typically cross the the amount to get a 1099 per year I still am not comfortable with giving them my SS# and think that is why many on here are upset. I did click one of my items that is still running to see if it would let me revise but got the error "Your ability to list new items, relist, and revise listings has been suspended, effective immediately. To resume managing your listings, please sign up now for eBay to manage your payments"

Land of the free...whatever that means anymore...free from what, lol....not much in terms of taxation.

It sucks. So I buy a pin, then 5 years later decided to sell, wth, why should I go taxed again for my garage sale item? Total bs, period.

Not my life. When people leave and refuse to participate in their scheme they will change it or go under. Collective movements have much power to change hardheads.

Not true and misleading. When people move to other venues without these draconian requirements its called economic empowerment. As I said earlier, I moved from eBay after a 20 year run and began selling on free markets sources with great success. It doesn't have to be difficult, deliver your items, ship your items, have the Customer pick it up.
Just rolling over and going along is yesterdays model and outdated.

This is good advice.

But in reality no one get audited for $5,000 in income.

It is best to sell your junk without any involvement of the tax people. They don't need to know anything and we need to do everything we can to keep them out of the loop.

21+ years and over 100,000 (unique) items sold on eBay and I am about ready to walk away completely. I just wish they would have waited ONE MORE YEAR until my wife starts with her Social Security check. I have 6 different eBay accounts and they have force me to "change over" two of them and locked me out of a third because I refuse to change it over. I still have 3 other accounts I can sell on and use Paypal but that is going to be "short live" because they are already sending me notices I have to change one of those over the end of this month. As soon as I start using either of the remaining two about a month later I'll get the same notice on those.

I am listing and selling like crazy right now hoping I can take in enough in the next couple months to be done selling for the year and just walk away. Only time will tell!

No pinball parts anymore - now I am doing model railroad stuff at about the same volume I was selling pinball parts a few months ago. I wouldn't even mind the change as much if eBay would offer the choice to transfer funds into my Paypal account but now all my sales going through "managed payments" get sent to my checking account and that just doesn't work for me.

I have been declaring 100% of everything since day one so the 1099 isn't an issue as long as my accountant handles it correctly this year. Last year they screwed it up and added what was on the 1099 to income I had already declared and I ended up overpaying on my takes by almost $5000. Months later I am still waiting for my refund checks from both Federal & State taxes. I think I need a better accountant!

You big time need a better accountant!

The Corona Virus mess this year didn't help at all. Our meeting with the accountant this past Spring was on the last day their office was open and everything just had a "weird" feel to it. Typically I would have caught their mistake but we never even got our copies of the paperwork until taxes were already filed and then 1/2 the paperwork we should have gotten we never received never got to us.

Then in December when I was looking back that the numbers I realized there was a $20,000 mistake in our "net income". Great for us that we overpaid since there would be no penalties or anything because we overpaid instead of under paying. Bad for us because I am still waiting for the refund checks.

"Shit Happens" but I will be sure I review EVERYTHING this year before forms are set off to IRS. Corona Virus or not this stuff has to be right the first time!

What makes things tough is we do a ledger with all our sales & income listed. Then eBay sends a 1099 showing our "income" on eBay and Paypal sends us yet another 1099 showing all the money we processed through them. So now all of a sudden I have two 1099's showing money already included in our gross sales?

Anyway "fool me once shame on you" but "fool me twice shame on me" - it will not happen again!

If you make $, you pay. It's that simple.

This is the clincher for me. Taxes are a necessary evil. But there's no way I'm giving them my SSN. Especially with the data breach they had in 2014 that compromised personal info. I'm going elsewhere. I don't know where yet...it won't be Facebook or Mercari. But I'm not going back to eBay.

Also in Massachusetts. First off, beware of the 1099 that Paypal sends you. These totals INCLUDE the items selling price, the shipping charged, and any tax collected. You must deduct the shipping, tax collected, shipping supplies cost, Paypal fee's, and Ebay fee's to establish your taxable income.
I keep a ledger of items sold with shipping costs. This helps at the end of the year to have your total shipping expense.

Of course, when filing taxes a Schedule 1 Form and Schedule C Form will be required to show Business Income. Best to have a professional do the taxes.

My accountant filed my corporate taxes today(due March 15th), and I wrote the checks for that.

I used to be see-these on ebay, selling 1000 items a week for several years long ago. The name is still there, but it is my neighbor using it for his records the last few years(with the understanding it is my account, and I can take it back over if I ever want to mess with ebay again.

Since 2002 I have mainly sold on Amazon, not as many problems with customers, but Amazon gets to be more and more of a pain.

It was always night and day difference how the customers buying on Amazon were so much better.

In the past Amazon may have sent me emails about my 1099 is ready to print or something. I never messed with any of it, they automatically deposit into my business account anyway, so all that is already covered.

I can not even remember the last time I received a 1099, but I am sure I told my accountant that all that is already included on my spreadsheet of totals for the year.

If you don't use one already, get a book keeping record book that you fill out. takes me about 30 minutes a month, and I can give my accountant everything he needs for the year on 2 pieces of paper that I fax to him.

The end of the year total is just 30 minutes to have all my tax info ready, by doing it monthly all year.

And no way would I give ebay or Amazon my SS #, but my EIN #, no problem, that should be all they need since all the funds are going into a business account.

If you are not in business, and start getting 1099's, or think you may, go ahead and get one of those book keeping record books and start filling in all your costs, like internet, printer, printer ink, electricity, etc., to have plenty of deductions for your accountant to use.

I highly recommend not even trying to do your taxes yourself if you are reading this topic.

And don't even try H and R block or any of that franchise stuff.

You need a accountant that you can trust, that someone else in business can refer you to theirs because they like them.

I used a h and r block right before I incorporated, and when I did get a full time accountant he went back and got me a whole lot that they had missed.

The h and r and a lot of that is just seasonal workers.

If you are in business, even small and trying to fly under the radar, you will be amazed how much a accounting firm that works all year, not seasonal, will be able to help you. IF, you find the right one.

The firm I use is close to a hour drive each way from me, but I have only drove there maybe 6 times in 25+ years, just fax and email.

Anyway, I have not messed with ebay in years. With all this SS stuff, is there a place for a EIN instead?

Because if not, that is totally bs, no way should they have to have your SS if you have a EIN.

Anyway, from what I have read here it actually sounds good that ebay is getting away from paypal and doing direct deposit like Amazon always has.

Paypal sucks! They are not your pal.

And I have never been on facebook or any of that and I never will.

Hell, I guess I could start a new career as a consultant, to show anyone how easy it is to take care of your bookwork for taxes.

The last time I ever did go see my accountant there were still people bringing in several grocery bags of stuff for him to go through, while all my totals are on 2 pieces of paper. (used to be one piece, but he needs rental houses separate). He basically rolled his eyes and said that he really wished I could inspire his other clients to be as organized as I am.

I have tried to inspire others to be organized, but they don't get it and don't do it, then at the end of the year they are all stressed trying to get everything together, and it only takes me 30 minutes, and faxing 2 sheets of paper.

I wish everyone here the best!

This has been a fun topic to read!

I always liked ebay even with all the criticism. It's great for finding odds and ends and figuring out what something is worth. Fees and taxes suck when you buy stuff but understandable. I don't get these changes, though. Why do I need to give ebay my ss#, bank account info, and more just to sell an old toaster? And if you sell a few bucks worth of stuff now that is treated like income? Sorry, no. I've been on ebay for more than 20 years. Glad I just sold off a bunch of old collectibles because no more.

For Ebay sellers, you need to read this.
I have been trying to figure out the fees I am being charged for my recent sales. Nothing was adding up correctly. The new policy is that a 12.35% commission is charged on the total sale, (including shipping fees), plus .30 for the transaction.
However, I noticed that I am being charged more than that. I just spent a half hour on an online chat with Ebay to get an answer. What they are charging is 12.35% for the item, plus the shipping you charged, PLUS the sales tax collected by Ebay!
Why the hell would I pay a commission on tax dollars collected by Ebay?
How can this even be legal?????

Because Big Tech has merged with Big Government. Get used to it.

Same as other marketplaces, and processing fees in general. If you go to Walmart and pay with a credit card, the credit card processor is charging a fee on the entire transaction amount including sales taxes.

There has been a lot of talk here about alternates. We are moving and the first step was to go through our stuff and determine what to keep, sell, donate, or trash. I've been posting a lot of stuff on FB Marketplace and CL, parallel. 95% of my stuff has sold on FB and very fast. I like to price stuff to move, but I'm not giving stuff away. For several items I started getting requests to ship even though I didn't set up the FB ad like that, and I did ship. I went to go convert some of my collectible ads to add shipping and FB required me to setup for their pay system. I ended that right there. So, if you aren't willing to signup for a new pay system FB probably is not a good alternative to a professinal seller.

I have bought several things from Mercari. It's marketed to the mom to take a simple photo and simple description to sell the things they don't want and put in a box and be done, plus make a few spending dollars. It's sort of like Ebay as old, but everything is Buy It Now because most everything is used. Maybe ok for the collictible seller, but I'm not sure it is a place for Ebay mega sellers.

I've searched Letgo and other similar aps and you may as well just be looking at FB and CL.

Yeah but the bank merchant is charging the total because it's the $$ they are actually processing through.

Ebay charging this fee not just as a money transaction, but as part of their service fees for ebay. That's why it's scummy.

I had the same questions a few weeks ago before finally figuring that out. The 10% final value fee before was always on your sales price plus the shipping cost. Paypal would charge their fee on the entire transaction including the tax collected (which still sucks). But now that ebay took it over they charge the final value fee (normally 10%) on that sales tax also. It definitely adds up over time.

I did read this, in the other thread where you posted the exact same screed.

My response there:

Would you rather they didn't handle the sales tax for you, and you had to keep track of (1) what tax was collected for each of dozens of states, and (2) which states wanted it annually, semi‐annually, quarterly, whatever, depending on the amounts, with every state having different thresholds, so you had to file potentially over a hundred small sales tax returns every year? Not to mention the risk any of them deciding to audit you?

12.35% of 5% or whatever is easily worth it.

No, I see your point. It just leaves a bad taste when Ebay says they're doing away with Paypal, and they will save you money. Oh well, have to suck it up as there is no other "game in town".

Got an email today they're also eliminating the ebay bucks for buyers. Never really a huge deal for me since I rarely buy on ebay any more, but just chipping away a bit at a time.

-Hans

According to the published fee rates, the difference is half a percent (0.0055). So not really some huge money saver. A few pennies at best for smaller items. A couple bucks in the $500+ range.

Just came across this article which states reporting changes are coming to every payment service with an amendment in the new covid bill:

https://www.google.com/amp/s/www.politico.com/amp/news/2021/03/05/gig-workers-coronavirus-relief-bill-losers-473902

Such a shame. People should be careful what they wish for.

Just noticed eBay now only asks for the last 4 digits of your SS#. I still won't give them mine but thought it was interesting.