Form 1099-K for eBay sellers: what it reports and what to do with it.

Form 1099-K is an information return. A payment card company or a third-party settlement organization (a payment app or online marketplace) sends one to you and to the IRS to report the payments it processed for you in a calendar year.¹

The number on the form is the gross amount of those payments, before fees, shipping costs, refunds, or what you paid for the item.¹ It is a record of money moving through a platform. It is not a statement of income after expenses and it is not your profit.

Under current law, a third-party settlement organization is not required to file a Form 1099-K for you unless the gross amount of reportable payments to you exceeds $20,000 and the number of transactions exceeds 200. The One, Big, Beautiful Bill retroactively reinstated that pre-2021 threshold, replacing the lower thresholds that had been phased in.²

Three details are worth knowing:

• The threshold is a floor for what the platform must file, not a ceiling. A platform may still send you a Form 1099-K for a smaller amount.³
• Payment card transactions have no threshold. If you received even a cent through a payment card, you should receive a Form 1099-K from the card processor.³
• Whether you get the form has nothing to do with whether the income is taxable. The IRS says all income is taxable unless the tax law says otherwise, even if you do not receive a Form 1099-K.³

Because the rules have changed several times, an older article that mentions $600, $5,000, or $2,500 for the federal threshold may be out of date. When in doubt, check the IRS pages listed at the bottom of this guide or ask a tax professional.

A state can require platforms to report to it, and to you, at a lower level than the federal rule. These states publish their own thresholds:

• Massachusetts: $600 or more in gross payments, regardless of the number of transactions, for payees with a Massachusetts address.⁴
• Virginia: $600 or more paid in a year to a payee with a Virginia mailing address.⁵
• Vermont: payments that equal or exceed $600 per person.⁶
• Illinois: a payee with an Illinois address who has four or more separate transactions with a cumulative total over $1,000.⁷

This is not a complete list. Other states have their own rules and they change. Check your state tax agency's website for the current threshold, and remember that a state form does not change what counts as taxable income on your federal return.

A reseller who buys a jacket for $12, sells it for $60, pays a marketplace fee, and buys a shipping label has a much lower profit than the $60 that appears in the platform's payment totals. A 1099-K for a full year of sales can look alarming next to your actual return for the same reason.

For a business, the usual pattern is to report gross receipts on Schedule C and then subtract returns, the cost of goods sold, and business expenses to arrive at net profit.⁸ Our Schedule C walkthrough covers where each piece goes, and the cost of goods sold guide covers the inventory side. The eBay fee calculator shows what a single sale nets after fees.

Compare the form to your own records. Platform totals can include sales tax collected, refunds, or transactions that are not yours, so a difference is a reason to look closer, not necessarily a mistake.

Many people receive a 1099-K after clearing out a closet or selling a used couch for less than they paid. The IRS says that if you sell personal items at a gain, that gain is income you must report. It also publishes separate instructions for the common case where a 1099-K includes personal items sold at a loss, which involve entering the form amount on Schedule 1 and then adjusting it so the loss does not create tax.⁹

The main idea is to keep the two kinds of sales apart. Personal-use items sold for less than you paid are generally not a deductible loss and are not taxed as income, but the platform's form does not know that, so your records are what show the difference. Inventory you bought to resell belongs on the business side, with its cost tracked as cost of goods sold. If you are not sure how to classify a sale, ask a tax professional.

• The Form 1099-K itself, and your platform's year-end sales report for comparison.
• Receipts or other proof of what you paid for each item you resold.
• Fee statements, shipping label records, and supply purchases.
• Records of refunds and returns.
• A note explaining any personal items sold, with what you originally paid if you know it.
• Mileage logs for buying trips (see the mileage guide).

Strooply brings several of these together: it records sale amounts and eBay fees and payouts from your synced orders, and its receipt scanning links what you paid to the item you sold. Its Taxes tab shows how much of your cost of goods sold is backed by a receipt and how much has no receipt on file. The tax summary is available on Pro and Team plans. It is a set of estimates to review, not a substitute for your own records or for advice.