Schedule C for eBay resellers: the lines you will actually use.

Schedule C (Form 1040), Profit or Loss From Business, is where a sole proprietor reports business income and expenses. An eBay reseller who is running a business usually files one. The bottom line, net profit or loss, flows to the rest of your return.¹ This guide is a map, not a filing instruction. Forms change each year, so check the current instructions and ask a tax professional about your situation.

• Line 1, gross receipts or sales: your total sales for the year. The instructions say to include income reported on Form 1099-K here.¹ Gross receipts for a reseller are item sales plus shipping the buyer paid. See the 1099-K guide for why the platform total is not your profit.
• Line 2, returns and allowances: refunds you gave buyers.
• Line 3: line 1 minus line 2.
• Line 4, cost of goods sold: the total from Part III, line 42.
• Line 5, gross profit: line 3 minus line 4.
• Line 6, other income: for example, interest or scrap sales.
• Line 7, gross income: line 5 plus line 6.

Part III is the inventory worksheet. It covers your method of valuing inventory, beginning inventory, purchases, other costs, and ending inventory, and it produces the number that goes on line 4.¹ For most resellers the inventory purchases, what they paid for items, are the biggest deduction on the form. See the cost of goods sold guide and how to split a receipt across items.

Part II lists expenses on lines 8 through 27a, totaled on line 28. These lines come up often for online sellers:

• Line 9, car and truck expenses: the standard mileage rate or actual expenses for business driving. Part IV asks about the vehicle.¹ See the mileage guide.
• Line 10, commissions and fees: marketplace fees such as eBay final value fees are commonly reported here, though a tax professional can confirm how to categorize them for you.
• Line 15, insurance and line 17, legal and professional services, including accounting.
• Line 18, office expense: the instructions include postage in this line. Shipping labels are commonly placed here or in other expenses, depending on how you and your preparer categorize them.
• Line 22, supplies: materials and supplies you use up in the business, such as boxes and mailers. Ask your tax professional how to divide items that are part inventory and part supply.
• Line 24a, travel and line 24b, deductible meals: travel away from home overnight is different from local driving to source.
• Line 27a, other expenses: anything that fits nowhere else, listed in Part V. Software subscriptions often go here.

Not every dollar is deductible, and personal costs do not belong on the form. When you are unsure how to categorize something, consult a tax professional rather than guessing.

Line 30 is for expenses for business use of your home. The instructions point to Form 8829 or a simplified method.¹ The space must generally meet the rules for regular and exclusive business use, so talk to a professional before claiming it, especially if you store inventory in a spare room. Line 31 is the result: net profit or loss.

The IRS treats an activity as a business when you engage in it with the primary purpose of income or profit and with continuity and regularity.¹ Occasional sales of your own belongings are generally not a business. A regular practice of buying inventory to resell for profit generally looks like one. The line can be subtle, so this is a good question for a tax professional.

If your net earnings from self-employment are $400 or more, you generally have to file a return and owe self-employment tax, calculated on Schedule SE.¹² That is separate from income tax, so set aside money for it. You may also owe estimated tax payments during the year.

The Taxes tab, available on Pro and Team plans, presents your year in a layout modeled on this structure: gross receipts, returns and allowances, net revenue, cost of goods sold (what you paid for the items that sold), business expenses such as eBay fees, shipping labels, supplies, and mileage, and an estimated net profit. It also shows how much of your cost of goods sold is backed by receipts. It is a summary to help you fill in your return or hand to a preparer. It is not a tax return, and line placement is still your or your preparer's call.