The eBay and TaxAct® Partnership
Important information about eBay, TaxAct®, and Form 1099-K new reporting threshold requirements
eBay and TaxAct®, a leading DIY tax preparation service, are partnering to help you understand and prepare for filing your income tax return using the new 1099-K reporting threshold requirements. To help eBay sellers understand these changes, eBay and TaxAct have launched a dedicated site, Tax Information Center for eBay Sellers. The Tax Information Center offers expert articles, blogs, tips, and insights that may be relevant to your unique situation. Following are frequently asked questions about the new requirements and information you need to know to help ensure that you’re compliant when you file your taxes.
Here’s what you need to know
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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.
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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.
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In 2023, for sellers who have already reached or will reach the $600 threshold within the calendar year, their account will continue to be in withholding until a Social Security number (SSN) or Individual Tax Identification Number (ITIN) is provided.
- eBay has partnered with TaxAct to help you navigate the new 1099-K reporting threshold requirements and get expert help when you need it.
Frequently Asked Questions
Can eBay help me with my tax return?
We can provide you with transaction information but we’re unable to give you tax, legal or accounting advice. We have partnered with TaxAct to provide information and resources to consider for your tax filing. Please reach out to a tax professional if you have any questions or concerns about any tax filing or regulations.
Why will casual sellers receive a Form 1099-K for selling a few used items?
Millions of US sellers who are cleaning out their garages and selling a few used items to make extra money will receive a Form 1099-K for tax year 2023. We appreciate that providing personal information and receiving a tax form can be a hassle for casual sellers. See what we’re doing to help.
What is TaxAct®?
TaxAct is an online tax-filing service that has provided millions of filers with affordable DIY tax software to successfully file their taxes on their own for over 25 years. TaxAct products enable all users—regardless of profession, tax bracket, or complexity of their return—to quickly and accurately file their taxes, all while discovering new ways to leverage their tax situation and improve their financial well-being. Filers can get help and tax advice from CPAs and other tax experts online for free, when they file with TaxAct. Learn more about TaxAct.
Do I have to be a TaxAct customer to access the Tax Information Center for eBay Sellers?
No. Anyone can access the Tax Information Center for eBay Sellers.
How can I prepare for my income tax filing for tax year 2023?
If you receive a Form 1099-K for tax year 2023, think of it as a guide designed to help you determine your taxable income. To prepare for filing your income tax return for tax year 2023, be sure to keep good records, understand that only profits are taxable, and confirm that eBay has your TIN. eBay and TaxAct are partnering to provide informational resources and tips to help you make sure you’re compliant and file your taxes with confidence. Learn more.
How do I calculate the taxable income from an online sale?
Generally, you only owe income tax on the net profits you make from a sale. TaxAct offers the following guidance for determining your net profits. Keep track of each item’s original price, sale price, and any expenses related to the sale. Use this formula to calculate your net profits:
Sale Price (what you sold the item for) – Cost Basis (what you paid for the product + any fees associated with the sale of the item) = Gain (your net profit)
Learn more about calculating your net profits.
Will I need to pay tax if I sell an item for less than I paid for it?
No need to worry—you only pay taxes on profits. You won’t owe any taxes on something you sell for less than what you paid for it. For example, if you bought a bike for $1,000 last year and then sold it on eBay today for $700, that $700 you made would generally not be subject to income tax.
Visit the Tax Information Center for eBay Sellers to learn more about the Form 1099-K tax requirements and how to prepare your tax return.