Any ebay sellers here?

[disneysteve]

I have to admit it is much easier to sell on ebay and track everything versus back in 2005. They have really simplified the entire process.

And way easier than when I started in 1997. Of course the downside of that is that everyone sells now. Much more competition.

 

[Katsmeow]

I don’t understand the tax form issue. I’ve been selling since 1986. I’ve been filing taxes since 1986. Last year was the first time I got a 1099. It made absolutely no difference except for having to include it with my return. Why would that keep anyone from selling?

I have heard from some people that they are concerned that if eBay gives them a 1099 for, say, $800 and then they report as profit $200 that the IRS will think they are cheating on their taxes.

Now, obviously, that should not be the case if the deducted expenses are legitimate.

Back in the 90s and early 2000s I sold a lot on eBay (mostly books and collectible cards such as Pokemon and Yugioh). It was a fun time. Back then I had some program that I ran that whenever someone bid on one of my auctions my computer would go ka-ching. I loved that ka-ching.

Anyway, I filed a Schedule C and did basically what you were doing. I kept very good records and never had any problems. Eventually life got busy and it became harder to make a profit on eBay and I gave it up except very occasionally for personal items.

I had thought about doing it again, but even I wondered if the IRS would be expecting me to pay taxes on the amount on the 1099 and if I would be invited hassle if questions. Yes, I could and would prove my expenses but I did hear others express the concern that it wouldn't be worth the time to deal with.

 

[disneysteve]

I have heard from some people that they are concerned that if eBay gives them a 1099 for, say, $800 and then they report as profit $200 that the IRS will think they are cheating on their taxes.

Now, obviously, that should not be the case if the deducted expenses are legitimate.

Back in the 90s and early 2000s I sold a lot on eBay (mostly books and collectible cards such as Pokemon and Yugioh). It was a fun time. Back then I had some program that I ran that whenever someone bid on one of my auctions my computer would go ka-ching. I loved that ka-ching.

Anyway, I filed a Schedule C and did basically what you were doing. I kept very good records and never had any problems. Eventually life got busy and it became harder to make a profit on eBay and I gave it up except very occasionally for personal items.

I had thought about doing it again, but even I wondered if the IRS would be expecting me to pay taxes on the amount on the 1099 and if I would be invited hassle if questions. Yes, I could and would prove my expenses but I did hear others express the concern that it wouldn't be worth the time to deal with.

Of course you don’t have to pay taxes on the 1099 amount. You aren’t taxed on gross. You’re taxed on net. That’s exactly how all of our taxes are done. You deduct mortgage interest, donations, 401k contributions, and any other deductions you are eligible for that reduce your taxable income. Then you pay tax on what remains.

Selling online is no different. The 1099 from eBay is total sales plus postage paid by buyers. Then you deduct actual postage, cost of goods, supplies, refunds, mileage, home office, etc. What remains is the taxable income.

 

[Katsmeow]

Of course you don’t have to pay taxes on the 1099 amount. You aren’t taxed on gross. You’re taxed on net. That’s exactly how all of our taxes are done. You deduct mortgage interest, donations, 401k contributions, and any other deductions you are eligible for that reduce your taxable income. Then you pay tax on what remains.

Selling online is no different. The 1099 from eBay is total sales plus postage paid by buyers. Then you deduct actual postage, cost of goods, supplies, refunds, mileage, home office, etc. What remains is the taxable income.

Yes, of course, I understand that fully. Nonetheless, when this new lower 1099 came out from eBay I heard/read several people being concerned that the IRS would basically assume the 1099 was the taxable amount and would challenge paying taxes on less and then you having to prove it all up (not just filing your Schedule C). I am not saying these people were correct just that I have repeatedly seen concern about it. Back when I did eBay I did exactly as you said with a Schedule C. I had no problem doing that. But I did see so many people feeling this way that the IRS would treat the 1099 as the presumptively taxable amount and wouldn't want to hear otherwise, that it spook me a bit (although I am not currently selling on eBay so this was just theoretical.

 

[disneysteve]

A lot of people don’t understand taxes. What I find a bit surprising is how many long-time eBay sellers simply have no clue. All that tells me is that they’ve been cheating on their taxes all these years and not reporting their income. The volume of wrong answers to tax questions I see in reseller groups is pathetic. I’m actually kind of hoping that the 1099 issue chases away a lot of the bad sellers.

 

[freedomatlast]

For taxes, you file a Schedule C. That's where you report your sales and deduct your expenses. Just make sure what you report matches the 1099 you get to the penny.

Are you filing Schedule SE too?

 

[disneysteve]

Are you filing Schedule SE too?

Good question. I’ll pull my 2022 return and check. I don’t personally do our taxes.

 

[obsessed]

Are you filing Schedule SE too?

Schedule C net income should also be reported on Schedule SE (at least that is what Turbo Tax did). A nice benefit that I wasn't expecting when I started selling on Ebay again was that I could deduct my ACA premiums up to my Schedule C income. Note this did not impact my Schedule SE.

 

[brucethebroker]

Been selling on ebay since 2010.
I am a yard sale junkie. Incredibly easy to find items for a couple of bucks that can be sold for $15 to $20, or $10 items that can be sold for $30+. I work about 8-10 hours a week (listing and shipping), and make more than I did as a licensed substitute teacher working 3 days a week (21 hours) during early in retirement. ebay, the original work from home!! Want to work in PJ's? No problem. Work while listening to classic rock? NP. Take a 2 hour lunch, and walk the dog? NP. Go on a short vacation (14 days or less) & keep store "open" & selling, to ship when I return? No problem.

Costs of selling on ebay are evened out by the amount of stealing that is done when selling at flea markets and antique malls, IMO. My buyers pay shipping costs, ebay gives me free shipping boxes and envelopes as part of my store plan. Buyers pay return shipping on returns.

I can buy enough merchandise during spring/summer yard sale season to list all winter, and have traveled multiple states to follow their "longest garage sales".

Many bad mouth ebay: to many fees, no appreciation of sellers, too many rules. Well, I really enjoy it, and ebay has been good about handling any problem I have brought to their attention. But, I know, it isn't for everyone.

And, yes, I am happy to put it all on my taxes, both income and expenses. BTW, my usual profit (net) is between $20 and $25 an hour-Except for the yard saleing...I do that for free. Not getting rich, but having a great time.

 

[disneysteve]

Are you filing Schedule SE too?

The answer is yes, SE is filed as well.

 

[disneysteve]

Been selling on ebay since 2010.


I am a yard sale junkie. Incredibly easy to find items for a couple of bucks that can be sold for $15 to $20, or $10 items that can be sold for $30+.

Many bad mouth ebay: to many fees, no appreciation of sellers, too many rules. Well, I really enjoy it, and ebay has been good about handling any problem I have brought to their attention. But, I know, it isn't for everyone.

And, yes, I am happy to put it all on my taxes, both income and expenses. BTW, my usual profit (net) is between $20 and $25 an hour-Except for the yard saleing...I do that for free. Not getting rich, but having a great time.

Thanks for posting. I agree 100%. Ebay isn't for everyone, but if you're interested and enjoy it and willing to put in the time, it's a great way to make money. I have so much fun going to the estate sales and yard sales that I really don't consider that part of it to be work. I love the treasure hunt. The listing part is definitely work to me but the payoff is worth it.

 

[freedomatlast]

The answer is yes, SE is filed as well.

As it should be. So Self Employment tax is being paid in addition to income tax on all earnings.

 

[disneysteve]

As it should be. So Self Employment tax is being paid in addition to income tax on all earnings.

Absolutely.

 

[Oilcan]

Interesting thread.

Just wondering how many here have been audited by the IRS?

 

[disneysteve]

Interesting thread.

Just wondering how many here have been audited by the IRS?

I’ve been selling since 1986. No audits for me. I keep good records and report everything I should.

 

[Katsmeow]

Been selling on ebay since 2010.
I am a yard sale junkie.

I have so much fun going to the estate sales and yard sales that I really don't consider that part of it to be work. I love the treasure hunt.

Back when I was selling I didn't do garage sales or estate sales. I would get undervalued books from used bookstores (eventually the bookstores wised up and that dried up quite a bit). That kind of thing. Once that and the other things I sold got to be unfun I quit doing it.

I did give some thought some years ago to trying the garage sale/estate sale thing. However, everything I read said that to make that work you had to be right there when it opened. I am a night owl so I don't get up that early to be there at dark thirty in the morning. Anyway, how necessary is it to get there early morning?

Back when I did eBay it was so different than how it is now. You had to do pretty much everything yourself. You had to format your listing. There really wasn't much help from eBay on how to do shipping. Usually I had to figure it for each sale individually. That was a real pain. Also, there were a lot more individual sellers as opposed to businesses.

 

[Koolau]

Honestly, it all sounds like w*rk.

When DW and I were downsizing, we paid 25% to let someone else do all the ebay stuff for us. I'm not sure he didn't cheat us, but we got a lot of money for stuff we had no use for, so I guess it beat w*rking another month or two - while getting rid of stuff. YMMV

 

[disneysteve]

I did give some thought some years ago to trying the garage sale/estate sale thing. However, everything I read said that to make that work you had to be right there when it opened. I am a night owl so I don't get up that early to be there at dark thirty in the morning. Anyway, how necessary is it to get there early morning?

I go to estate sales when they open on day 1. I go to them close to closing time on day 3. I buy stuff either way. Sometimes they bring more stuff out as the sale goes along and space gets freed up so there will be items on day 2 or 3 that weren't even there on day 1.


See post #70. I bought that film on day 3 of that sale. I was there on day 1 and bought other things. On day 3 I also bought a set of Lenox spice jars worth $500 and paid $15.


Yard sales are a little different. You do tend to do better getting to those early, but can also get great deals later in the day when they're finishing up and just want to get rid of stuff. Heck, sometimes the best "deal" is driving through the neighborhood the evening after a community yard sale and seeing all the stuff people put out for trash because it didn't sell.

Back when I did eBay it was so different than how it is now. You had to do pretty much everything yourself. You had to format your listing. There really wasn't much help from eBay on how to do shipping. Usually I had to figure it for each sale individually. That was a real pain. Also, there were a lot more individual sellers as opposed to businesses.

I've been on ebay since 1997 (it started in late 1995) so I was an early adopter myself. For shipping, you basically have 3 options. Calculated shipping you just enter the weight and dimensions. Then the system automatically calculates the cost based on the buyer's location. Fixed price shipping where you set the shipping charge yourself. And "free" shipping where you just roll it into the item's price. I mostly do fixed price. I use calculated on larger items and occasionally use free mainly on Media Mail items where I know exactly what it will cost regardless of location.

 

[disneysteve]

Honestly, it all sounds like w*rk.

When DW and I were downsizing, we paid 25% to let someone else do all the ebay stuff for us. I'm not sure he didn't cheat us, but we got a lot of money for stuff we had no use for, so I guess it beat w*rking another month or two - while getting rid of stuff. YMMV

It's certainly not for everyone. Me? I love doing this stuff. Finding something at an estate sale for $8 and coming home and selling it for nearly $500? That gets my adrenaline going every bit as much as the guy winning at the craps table. I'd rather "risk" my money buying stuff to resell and if you know what you're doing, there's really virtually no actual risk.


In 2022, I spent $1,745 on items to resell. As of today, I have made sales of $13,653 from those items. So even if there were a few dud purchases in there, it doesn't matter as the sales more than make up for it.

 

[Katsmeow]

Honestly, it all sounds like w*rk.

When DW and I were downsizing, we paid 25% to let someone else do all the ebay stuff for us. I'm not sure he didn't cheat us, but we got a lot of money for stuff we had no use for, so I guess it beat w*rking another month or two - while getting rid of stuff. YMMV

Back when I did eBay, I found it fun. I still had a day job then and the eBay stuff was purely a hobby. The thrill when you would sell something for way more than you expected was really a lot of fun. Eventually I quit doing it but I enjoyed it a lot when I did it.

I go to estate sales when they open on day 1. I go to them close to closing time on day 3. I buy stuff either way. Sometimes they bring more stuff out as the sale goes along and space gets freed up so there will be items on day 2 or 3 that weren't even there on day 1.


See post #70. I bought that film on day 3 of that sale. I was there on day 1 and bought other things. On day 3 I also bought a set of Lenox spice jars worth $500 and paid $15.

Sounds like estate sales might be worth me checking out sometimes. When my mom died we had an estate sale done for 3 days. Each day they reduced the prices and, yes, it was even lower near the closing time. I know some people got some good deals. One of the fun things sold was a Jimi Hendrix poster that I had bought as a teenager. Somehow my parents never got rid of it. Thankfully, the people running the estate recognized it and sold it for a couple of hundred dollars. I would have assumed it was worth almost nothing....

 

[disneysteve]

The thrill when you would sell something for way more than you expected was really a lot of fun.

I went to an estate sale on Friday and bought 3 Lenox carousel animal figurines, several books, and a few other things. I paid a total of $30 for everything.

I just sold one of the Lenox figurines for $93.

Where else can I triple my money in 3 days? And I still have the other 2 figurines, the books, and the other items to sell. The figurines are listed for $85 and $90, one book for $25, 3 books for $10 each, and I've got some cross stitch fabric and a mug I haven't listed yet. By the time I'm done, I'll sell everything for over 10 times what I spent.

Yes, this is fun to me.

 

[disneysteve]

I went to an estate sale on Friday and bought 3 Lenox carousel animal figurines, several books, and a few other things. I paid a total of $30 for everything.

I just sold one of the Lenox figurines for $93.

Where else can I triple my money in 3 days? And I still have the other 2 figurines, the books, and the other items to sell.

Today I sold the second of the Lenox figurines for $78.50. That brings my sales to $171.50 so far from my $30 purchase 4 days ago.

 

[disneysteve]

I thought I'd bump up this thread again. These numbers include both ebay and Facebook Marketplace.

2023 Totals
$13,325.29 gross
$9,455.82 net (before taxes)

$1,608.44 Cost of goods sold for the year

My average monthly profit was $787.99 with my lowest month being $610 and my best month being $1,033.

For 2024, my goal is a monthly profit of at least $600 and to get my average daily sales up to 2 items. My 90-day running total right now is 142 so about 1.58 items/day.

 

[OldShooter]

... My average monthly profit was $787.99 with my lowest month being $610 and my best month being $1,033. ...

Have you accounted for the value of your vehicle cost, time spent shopping, traveling, packing and shipping? Not trying to throw cold water as it sounds like a fun hobby, but as a small business mentor it is very common for me to see P&Ls that don't consider that the owner's time has value.

What we tell people is that an owner is entitled to two kinds of income. First is a market rate income based on time spent running the business. Second is a capital investment return based on the risk of the investment. I'll often suggest 25% as a reasonable investment expectation, primarily based on risk.

My guess is that even after considering the value of your time you are still doing pretty well.

 

[disneysteve]

Have you accounted for the value of your vehicle cost, time spent shopping, traveling, packing and shipping? Not trying to throw cold water as it sounds like a fun hobby, but as a small business mentor it is very common for me to see P&Ls that don't consider that the owner's time has value.

What we tell people is that an owner is entitled to two kinds of income. First is a market rate income based on time spent running the business. Second is a capital investment return based on the risk of the investment. I'll often suggest 25% as a reasonable investment expectation, primarily based on risk.

My guess is that even after considering the value of your time you are still doing pretty well.

There are certainly other costs. Some of them are tangible and will get deducted at tax time like mileage, packing materials, and office supplies. Others are intangible like my time. For that, though, I really enjoy what I'm doing. I love going to estate sales and finding treasures that I can resell for 10 or 20 or 50 times what I paid for them.


It keeps me active physically and mentally and it has led to me meeting many people both in person and online. I'm a "group expert" for one ebay seller Facebook group where I help answer questions and mentor other sellers. I've been the featured guest on two episodes of an ebay seller podcast. Last year I attended my first in-person ebay seller event where I had the opportunity to chat with the CEO for a bit which was really neat.