new 600 dollar SALES threshold for IRS Reporting , and ebay 1099-k required (2024)

FAQs

Do I need to report my taxes if I sold over $600 on eBay? ›

You pay taxes on your profit, not on what you sell. If you sell more than $600, you will have to report what you sold and your profit, if any, on your taxes.

The new ”$600 rule”

Under the new rules set forth by the IRS, if you got paid more than $600 for the transaction of goods and services through third-party payment platforms, you will receive a 1099-K for reporting the income.

For background: The ARPA lowered the reporting threshold to impose a reporting requirement on TPSOs on Form 1099-K from gross payments of more than $20,000 and 200 transactions for a payee to gross payments totaling more than $600 (regardless of the number of transactions) for a payee.

Why do I need a Form 1099-K? For 2023, the IRS requires eBay and other online marketplaces to report total sales exceeding $20,000 and 200 transactions on Form 1099-K.

For tax year 2024, the IRS is planning a threshold of $5,000.

Key takeaways

Whether or not you have to pay income taxes on eBay sales depends on the nature of your sales. If your eBay sales add up to more than $5,000 in a year, eBay will send you a Form 1099-K, which lists the total amount of payments you received throughout the year.

On November 21, 2023, in Notice 2023-74, the IRS decided to further delay the implementation of this reporting change until the 2024 tax year and increase the $600 threshold to $5,000.

If your transactions totaled $20,000 or more and you had at least 200 transactions through an online marketplace, you will receive Form 1099-K for tax year 2023. In 2024, you will receive Form 1099-K if you have any number of transactions that totaled $5,000 or more.

Who is likely to get the 1099-K form? For tax year 2024, the 1099-K form is for anyone who receives over $5,000 from at least one business transactions. So, think about whether you're a gig worker, freelancer, or self-employed.

Once you reach the sale threshold — $20,000 and over 200 transactions for 2023 or $5,000 in 2024 — eBay will ask you to provide your TIN to comply with IRS reporting requirements. MAke sure to confirm that the information you provide to eBay is accurate and matches what the IRS has on file for you or your business.

What is the minimum sales for a 1099-K? ›

If you used a payment app or online marketplace and received a Form 1099-K. A payment app or online marketplace is required to send you a Form 1099-K if the payments you received for goods or services total over $20,000 from over 200 transactions. However, they can send you a Form 1099-K with lower amounts.

Yes. The IRS requires that you report all of your income, even if it's less than $600 and you didn't get a tax form for it. Follow these steps to enter your income. We'll ask you some questions to determine if your income is from self-employment or is ordinary income.

If we sold more than $600 worth of anything during each year, it will be reported to the IRS and their system will treat it as reportable income. Even if you are selling at a loss, or reselling a used item of yours, and you won't legally be required to pay any tax on it.

If you have more than $20,000 in sales, your total sales from eBay will be reported to you on Form 1099-K, a tax form that specifically covers credit, debit, and third-party online transactions. If you have less than $20,000 in third-party transactions, you will not receive a Form 1099-K for the 2023 tax year.

If there's an issue with any transaction on your Form 1099-K, you can contact us with the item number and any relevant information about the transaction. Additionally, Form 1099-K does not include sales tax, which is automatically collected and remitted by eBay.

In the cases where eBay collects sales tax for you, you do not need to do anything. In the cases where eBay does not collect sales tax, and you have nexus in the state your buyer comes from, you will need to collect and remit the tax yourself.

eBay does not report "profit" to the IRS. eBay reports the payments they process as required by law. eBay is required by law to report the total of all payment processed on your behalf (including shipping but not including sales tax) on the 1099-K form.

If you made a profit or gain on the sale of a personal item, your profit is taxable.

But tax law changes now require any website that processes more than $600 in payments to a customer to report them to the IRS. The reporting requirements take effect for the 2023 tax year. You still must pay tax on sales totaling less than $600 a year, but websites are not required to report those sales to the IRS.