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...