Barnstable, MA
Quoted from Redfive05:22 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.
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.
