I got a 1099-K from eBay. Problem is that I only sold $700 worth of stuff. In looking in to this I’m only supposed to receive this form if I sell over $20,000, but Maryland requires the form over $600.
In looking in to it I’ve found I’m supposed to enter the form in to schedule C, but in doing this I can’t find any place to enter how much it cost me for the item in the first place, plus the cost of shipping and the cost of eBay fees.
I’d just enter it and let it go, except it raises my taxes by $250. I don’t mind paying taxes, but that is a huge amount to pay for selling one item. I’ve read that one can enter the form but tell the IRS that I’m not supposed to be getting the form, but I have no idea where to enter that information either. The H&R Block program has not been helpful.
I’d like to get my taxes done, but this is causing me some fun problems. Any ideas?
What version of the software are you using? anything but the free version should include tech support/tax advice. You can also get a tax advisor to look over the return or add that part.
I don’t know about the entry mechanics, but $700 is your gross revenue. You are not taxed on that, you are taxed on your net profit. What you paid for the stuff you sold should be subtracted, along with expenses associated with your activity.
Yes, I understand that part, what I can’t find is where to say how much things cost me. After entering the form the next questions all deal with office space, transportation costs, electric costs, things like that, nothing about how much I paid or anything to subtract the fees. That’s why I’m confused since I thought there would be something like that. I’ve gone through it a few times to see if I’ve missed it, but don’t seem to, so if it’s there it’s buried and not part of the questions they ask.
I have the deluxe version, and there help hasn’t been much help. I could pay someone to help me, but by the time I did that it would cost the same as just eating the cost of paying the full taxes.
Schedule C, Part I, Line 4 “Cost of goods sold (from Line 42)”. Lines 33-42 are the worksheet for calculating that.
The 1099-K (along with any other business-related 1099 income) goes on Line 1 of Schedule C. The entirety of Part I is about computing your business’ net revenue and then net income.