Guide · 6 min read
eBay's 1099-K shows your gross sales — not what you keep. Here's how to track fees, COGS, and shipping so the IRS only taxes you on real profit.
The final value fee is typically 13.25% of the total transaction (item + shipping + sales tax in most categories), plus $0.30 per order. Add Promoted Listings (2–15%), Store subscriptions, and shipping label costs and an "easy" $30 sale leaves you with about $20 before COGS.
Open a free business checking account and use it as your Managed Payments deposit account. Never run reseller money through your personal account.
Seller Hub → Payments → Reports. Download the transaction report as CSV at month-end. It contains every fee, refund, and payout.
Every item sourced (thrift, wholesale, garage sale, estate sale) is a deductible expense. Keep receipts in a folder and log them weekly — usually the biggest write-off resellers have.
Set aside ~25–30% of net profit each month for self-employment + federal tax. The IRS doesn't care that eBay didn't withhold it — quarterly payments are still due.
Import your eBay statements, tag fees and COGS, and see real profit per month.
Start freeYes if you cross the federal threshold — $5,000 in 2024, $2,500 in 2025, and $600 in 2026 and later. Some states have lower thresholds. The 1099-K reports gross sales, so you must deduct fees, shipping, and cost of goods to arrive at real taxable income.
All eBay seller fees are 100% deductible: insertion (listing) fees, final value fees (typically 13.25% in 2026), payment processing inside Managed Payments, Promoted Listings fees, Store subscriptions, and international fees.
If you buy or make things to resell for profit, the IRS treats it as a business — even part-time. Hobby income gets fewer deductions, so it's usually better to structure it as a sole-prop side business and deduct everything legitimately.
Yes — it's usually the single biggest deduction for resellers. Keep receipts for every sourcing trip, thrift haul, wholesale order, or supply purchase. Without COGS tracking, you'll pay tax on gross revenue instead of profit.
Connect a dedicated bank account to Managed Payments, download the monthly transaction report from Seller Hub, and log cost of goods + shipping supplies as you go. A simple tool that imports the report saves hours each month.