General

The reporting threshold for 2024 is supposedly $5,000 gross sales. Irs can change their mind if they want though.

Shipping and sales tax are also included in your gross sales figures so keep that in mind. The gross sales is reported to the IRS but that is not the amount you need to pay tax on.

You need to pay tax on the income: gross sales minus costs (ebay fees, sales tax, shipping, and what you paid in the first place for the stuff you sold).

Don't trust eBay to provide a breakdown of fees for you at the end of the year. You should be keeping track yourself with every sale.

If you aren't keeping track of how much you pay for the things you later sell on eBay start doing it now, If you sell an item for $100, but your costs are $90, you made 10 dollars. Do that 50 times and you hit the reporting threshold despite only making $500 profit. If you can't prove your costs were $90, you might end up paying tax on more than your actual profits if you get audied. Same thing can happen even if you are selling at a loss. If you aren't keeping good records, you should stop selling well before you hit the reporting threshold just to make sure.

Grading games is 100% a scam. Just don't.

benstylus wrote:

Goofy question, aren't there certain states too that have their own thresholds? I could have sworn there were a few states that were at a thousand or even less per year. I could have sworn I read something about this. I'm currently in Illinois and I remember being pissed off when I saw the new thresholds announced.

Yes, a few states have lower thresholds for online sales. My state - Virginia - is one. I was surprised a few years ago when I got a 1099 from eBay as I never sell anything close to $20,000.

There are other things you need to know besides the tax laws. The tips I would give you or anyone else who want to use Ebay is first make sure you purchase insurance on packages. If the item is lost, stolen or damage Ebay will find you as the seller responsible. You will then have protection with that insurance. Print all labels through Ebay to get the discount offered. Don't pay regular price at a carrier location if you don't have to. Know and understand the return policies. Know that Ebay allows returns on items filed as "Not as described" regardless if you state "No Returns." If a buyer insists they want to return an item and does it within 30 days they will have an easy way of doing it. If a buyer wants to cancel out an order immediately just honor the request and cancel the transaction with a refund. It's not worth the hassle shipping an item to someone who doesn't want it. They can just make up a lie and just return it at your expense. My recommendation is just to offer the 30 day returns. Majority of the time buyers don't use it but you get a few that do but it makes buyers feel more comfortable buying with guarantees. Know that Ebay has an International program now where buyers can purchase your item through the program even if you state no International shipping. Make sure those items are well packaged like use a box instead of a bubble mailer. Make sure you take enough photos for a buyer to know what they are getting. Know that you will come across some people who want all the photos in the world from you and land up not buying at all.

All this stuff that's been shared is major reason I refuse to mess with Ebay any longer... let alone try to sell on it.

Ship something and they didn't like it? Tough crap, you lost your sale.
Ship something and they didn't get it? Tough crap, you lost your sale.
They ordered it and decided they don't want it before you ship it? Touch crap, you lost your sale... probably also paid certain fees on the sale you won't get back for canceled order.

Yeah if you can sell it somewhere else I'd honestly try that first. eBay is a last resort for me at this point. It does get a lot of eyeballs on your items though.

99.9% of buyers on eBay just want to get the item and won't cause an issue. I've been on there since 1998 and can count the number of scams/cancels/returns I've had from buyers on one hand.

benstylus wrote:

I'd agree with this. I'm really just over the tax crap.

Gypsy wrote:

Yes, but you really can't blame ebay for that. Having people stay away from their platform for fear of getting a 1099 means less money. That's why they (and other similar platforms and payment processors like easy, PayPal, and venmo) are lobbying hard to keep that threshold high so it really only affects the people it should: businesses.

I don't really like eBay, but for me it is the best option for selling small items. Between eBay taking about 15% of the transaction (selling price, shipping, and even tax) and the increases in postage, it is getting less worthwhile. Due to the price of postage, I mostly stick to media and other small items where the final weight is less than one pound. Flat rate packages used be to be a good option (especially when the item was breakable), but the increased prices have decreased my use of them.

I've sold on eBay for 15 to 20 years and have had very few issues with buyers through the years. The most recent problem was several years ago when eBay authorized return of a clothing item when my ad specifically stated I would not accept a return. Many buyers and sellers like the "free shipping" option for auctions, but I always state a flat rate for shipping that includes my estimated postage cost plus eBay's 15% charge. My auctions state that only the purchase price will be refunded, and the buyer will be responsible for return shipping.

I always try to cover myself in the item description so there is no chance that the buyer can blame anyone but themselves for not getting what they thought they were getting. I take pictures from all angles and point out any flaws that I think might be of concern. I once bought a bunch of new name brand and generic ink cartridges that were out-of-date. In each auction I included the manufacturer's warranty expiration date and added a statement that I could not test the items, so the auctions carried no stated or implied guarantee.

Thanks for the tips everyone. I know its been a while since I've come back to respond to this post. But all the responses are greatly appreciated. Ebay definitely seems super stressful. I remember before it was as simple as pay the listing fee's. Take great pics and put as accurate a description as you can. And it just got wayyyy more complicated over the years.

I don't think it's that bad once you get used to it. Daunting at first, but once you get a few sales under your belt it becomes pretty easy. There are substantial fees, but I think you'd struggle to find a place you can consistently get more money for your items, even after considering the fees.

You do have to keep track of stuff for taxes if you sell over a certain amount.

You can get screwed over by the buyer if you get unlucky or list things poorly. I rarely have issues but it does happen.

I've never once purchased shipping insurance and I can't think of a single instance where shipping insurance would have done me any good whatsoever.

If you have really nice, factory sealed games, grading might be worth it. There is 100% some shady stuff happening at the high end of the graded games market, but the majority of graded game sales are above board. It's almost certainly a bubble that will eventually pop, but if you are trying to sell these items i'd at least recommend looking into it. I've never had anything graded myself, but from a purely financial perspective there are definitely some instances where grading a game increases the resell value more than the cost of getting it graded. If I ever graded games, i'd probably go with WATA.

If you do sell, don't generate a label and then wait 3+ days to actually give the package to USPS.

imnotdarrell wrote:

As every business does, eBay evolved to increase their profits and comply with government regulations. Initially, Buyers and Sellers were on their honor regarding paying income tax and sales tax on out-of-state purchases. The federal government realized that high value and high volume sellers were not paying income tax on their profits. State governments realized they weren't getting sales tax. Also, I recall when eBay didn't charge a fee on the postage, so Sellers would sell items for $0.01 and charge S&H that guaranteed them a decent profit. e.g. I bought a sound card for $0.01 with $11.95 S&H when the postage was less than $5. eBay realized they got way more listings (and subsequently made a lot more money) when they gave "free" listings and only charged a listing fee if the item sold.

I agree with the above. For the occasional seller, there's not much difference between old ebay and new, except all payment is done through ebay's website.

If you hit the magical threshold you get 1099'd but if you know what that is ($5k gross sales including shipping/sales tax for this year) you can stop selling when you start to get close.

According to the information on eBay, the current limit is $20,000, but unless something changes it is supposed to be lowered to $600 soon.

Here’s what you need to know:
On November 21, 2023, the IRS issued Notice 2023-74 providing another delay of the $600 reporting threshold to help ease the transition to the new reporting requirement.

As a result, for tax year 2023, only eBay sellers who exceed the current reporting threshold of $20,000 and 200 transactions, had backup withholding applied in 2023, or are residents of states that have a lower reporting threshold will receive a Form 1099-K.

For 2023, all sellers who reach the $600 threshold must provide a Social Security number (SSN) or Individual Tax Identification Number (ITIN) to access any blocked funds.

https://www.ebay.com/sellercenter/resources/change...

$20,000 is last year's limit.

The IRS announced plans to make it $5,000 for 2024 to help phase in the $600 limit less abruptly.

https://www.irs.gov/newsroom/irs-announces-2023-fo...