Does eBay Give You a 1099-K? Thresholds, Deductions, and Losses

eBay does send a 1099-K, but only when your account crosses the federal reporting threshold: more than $20,000 in gross payments and more than 200 transactions in the same calendar year. Both conditions have to be met. If you live in a state with its own lower threshold, a form can show up sooner. And whether or not one arrives, any profit you make on eBay is taxable income you’re expected to report.¹

The Current Federal Threshold

The One, Big, Beautiful Bill Act, signed in mid-2025, permanently restored the pre-2021 reporting threshold. Under current law, eBay is not required to issue you a Form 1099-K unless your gross payments exceed $20,000 and you have more than 200 transactions in a calendar year.²

You will run into outdated numbers everywhere, so it helps to know the recent history. The American Rescue Plan lowered the threshold to $600 with no transaction minimum in 2021, but the IRS delayed enforcement year after year. Transitional thresholds of $5,000 for 2024 and $2,500 for 2025 were floated during that stretch.³ The One, Big, Beautiful Bill wiped all of that out and locked the $20,000-and-200-transaction rule back into place going forward.⁴

States That Trigger a 1099-K Sooner

Several states require payment platforms to issue a 1099-K at thresholds well below the federal one, often $600 with no transaction minimum. States known to maintain a $600 threshold include Massachusetts, Maryland, Vermont, and Virginia, among others. State rules shift, so check your state tax authority for the current figure where you live.

A state-triggered form doesn’t change your federal tax. It just means the IRS also has a copy of the numbers. You calculate your federal taxable income the same way either way.

What the Number on the Form Actually Means

If a 1099-K arrives, the amount in Box 1a is the gross total of payments processed through eBay. That figure includes the full sale price of every item, shipping charges buyers paid, and sales tax eBay collected. It does not subtract eBay’s fees, the cost of the items you sold, refunds you issued, or anything else.⁵

This is where sellers overpay. If you drop the 1099-K number onto your return as-is, you’ll be taxed on money that was never profit. A seller with $8,000 in gross sales and $5,500 in inventory costs, fees, and shipping earned $2,500. That $2,500 is the taxable amount, not the $8,000.

Deductions That Reduce What You Owe

If you’re operating as a business, you report income and expenses on Schedule C of Form 1040, and only your net profit is taxed. Deductions that commonly apply to eBay sellers include:

Cost of goods sold: what you paid for the items you resold, plus any repair or refurbishment costs.
eBay platform fees: final value fees, listing fees, and promoted listing charges.
Shipping and packaging: postage, boxes, tape, bubble wrap, labels.
Vehicle expenses for business trips (post office, thrift stores, sourcing), either actual costs or the IRS standard mileage rate.
The business-use share of your internet and phone bills.
Home office use, if a space is used regularly and exclusively for the business, including inventory storage. The simplified method allows $5 per square foot up to 300 square feet, capped at $1,500.⁶

Keep the receipts. The IRS will not accept an estimate. If you can’t document an expense, you can’t claim it.

Personal Items Sold at a Loss

If you cleaned out a closet and sold used clothes, old electronics, or furniture for less than you originally paid, you don’t owe tax on those sales. You still may need to address them on your return if eBay reported the payments on a 1099-K. Losses on personal items can’t offset other income, but you can zero out the reported amount so it isn’t taxed.⁵

There are two ways to do it:

Enter the amount on Schedule 1 (Form 1040) in the designated space at the top of the form. Use this when everything on the 1099-K was personal items sold for less than you paid.⁷
Report the sales on Form 8949, which flows to Schedule D. Use this when you sold a mix of items with some gains and some losses.

If a personal item sold for more than you paid for it, the gain is a capital gain reported on Form 8949 and Schedule D, not a loss offset on Schedule 1.

Self-Employment Tax Catches Sellers Off Guard

This is the piece most new sellers don’t see coming. If your net profit from eBay exceeds $400 in a year, you owe self-employment tax on top of income tax. Self-employment tax funds Social Security and Medicare, and because you’re both employer and employee, you pay both halves: 15.3% of net earnings (12.4% Social Security plus 2.9% Medicare).

A seller with $5,000 in net profit owes roughly $765 in self-employment tax before any income tax is calculated. You can deduct half of the self-employment tax as an adjustment to income, which softens it a little. If you expect to owe more than $1,000 in combined income and self-employment tax for the year, the IRS expects estimated quarterly payments; skipping them can lead to an underpayment penalty.

No 1099-K Doesn’t Mean No Tax

Not receiving a form doesn’t make the income tax-free. Federal law treats gross income as all income from whatever source derived, and eBay profit is included.⁸ If you profited from sales, you’re required to report it, whether the total was $500 or $50,000. The 1099-K is a verification tool for the IRS; its absence doesn’t lift your obligation.

Sellers below both the federal and state thresholds still need to track sales and expenses and report net profit. Failing to report taxable income can bring accuracy-related penalties of 20% of the underpayment, plus interest. The IRS may not catch it right away, but when it does, the bill compounds.

If a 1099-K Arrives With Wrong Numbers

Forms sometimes include refunded transactions, duplicate payments, or activity that isn’t yours. If the amount on your 1099-K looks wrong, contact eBay to request a corrected form. The issuer’s name and phone number appear in the upper left corner, and it’s worth keeping copies of everything you send and receive.⁹

If eBay won’t correct it, you can neutralize the error on your return. Report the incorrect amount on Schedule 1 (Form 1040), Line 8z as “Other Income — Form 1099-K Received in Error,” then enter the same amount on Line 24z as “Other Adjustments — Form 1099-K Received in Error.” The two entries offset, and your adjusted gross income isn’t affected.⁹

1
Internal Revenue Service. Understanding Your Form 1099-K
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Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill; Dollar Limit Reverts to $20,000
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Internal Revenue Service. Revised Timeline Regarding Implementation of Amended Section 6050W(e)
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Internal Revenue Service. One, Big, Beautiful Bill Provisions
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Internal Revenue Service. What to Do With Form 1099-K
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Internal Revenue Service. FAQs – Simplified Method for Home Office Deduction
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Internal Revenue Service. Instructions for Schedule 1 Additional Income and Adjustments to Income
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Office of the Law Revision Counsel. 26 USC 61 – Gross Income Defined
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Internal Revenue Service. Actions to Take If a Form 1099-K Is Received in Error or With Incorrect Information