Alright, tax experts... Its almost 1099k time, what am I in for?

  • Thread starter Thread starter napalmdeath
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napalmdeath

napalmdeath

Well-known member
I sold 30 items on Reverb, and will definitely be getting the dreaded 1099. So, will I have to itemize each item with paid/sold and losses or just one total Net, and gross? I never made a profit on anything, broke even on most or took a loss. I know I have no tax obligations, just wondering how much of a pain in the ass this will be..
 
A lot to dig into, but you will technically owe taxes on any profit and you can't write off losses or lower tax obligations from other sales unless you're a business. Example bought item A for $100, sold for $150 you will owe on that $50 and the amount will be determined depending on your tax bracket.
Example bought item B for $100, sold for $50 you will owe nothing on that particular transaction, but it doesn't change the above.

Most tax software should have easy electronic populating for what reverb/paypal will issue you. You will likely have to pay to use that.
You can put whatever numbers you want in it, but if you get audited you will need to show receipts otherwise you will owe on the entire amount of gross sales. You may also need to file other forms as the same transactions will likely have Paypal send you the same and appear as if they are not.
Pretty easy to figure out, a little time consuming. There's some links at the bottom of this reverb page that may help understand the situation a bit better.
https://help.reverb.com/hc/en-us/ar...re-the-US-tax-reporting-requirements-for-2024
 
skoora said:
Am I correct in that they haven’t lowered it to a $600 threshold yet?
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Some states have different requirements which may include as little as $600, as for the 2024 federal tax year it's $5k.
 
Did you input your cost into Reverb? Hopefully they will essentially handle it for you by submitting only earnings.

They also have an Excel file you can download that has everything line by line, including fees and shipping expenses if you used their shipping. You might need to do it by month, not sure if they let you pull the whole year down at once.
 
Candiria said:
Did you input your cost into Reverb? Hopefully they will essentially handle it for you by submitting only earnings.

They also have an Excel file you can download that has everything line by line, including fees and shipping expenses if you used their shipping. You might need to do it by month, not sure if they let you pull the whole year down at once.
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Yeah, I have my cost loaded to the spreadsheet as well, I don't think people are getting my question. I'm not worried about owing any tax, it won't be the case. I'm trying to understand if I will have to go through all 30 items with earnings and cost, line by line??

And for those that don't know, the changed the $600 that was to go into effect in 2025 was changed to $2500. 2024 is $5000.
 
napalmdeath said:
Yeah, I have my cost loaded to the spreadsheet as well, I don't think people are getting my question. I'm not worried about owing any tax, it won't be the case. I'm trying to understand if I will have to go through all 30 items with earnings and cost, line by line??

And for those that don't know, the changed the $600 that was to go into effect in 2025 was changed to $2500. 2024 is $5000.
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Just total. You won't pay tax on the ones you made a profit on if your total is a loss. I would personally do it line by line anyway, but you don't have to if you know all your total revenue and expense.
 
Candiria said:
Just total. You won't pay tax on the ones you made a profit on if your total is a loss.
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Unless it's a business that's not correct. Any profit is taxable despite losses.

napalmdeath said:
Yeah, I have my cost loaded to the spreadsheet as well, I don't think people are getting my question. I'm not worried about owing any tax, it won't be the case. I'm trying to understand if I will have to go through all 30 items with earnings and cost, line by line??

And for those that don't know, the changed the $600 that was to go into effect in 2025 was changed to $2500. 2024 is $5000.
Click to expand...

You will want that information on hand for the IRS if/when they ask for every single transaction including receipts. You will report the difference in totals between the 1099k and miscellaneous income form as a negative number. Say your 1099k form says $10k in gross sales and you profited a total of $100 from a few of them. Your miscellaneous income would be -$9,900.00 to offset and you would be responsible to pay taxes on the $100. You don't need to line item them except for your records when/if the IRS asks.
 
Candiria said:
Just total. You won't pay tax on the ones you made a profit on if your total is a loss. I would personally do it line by line anyway, but you don't have to if you know all your total revenue and expense.
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I made ZERO profit on anything. Sad, but true.
 
You'll get a single 1099-K that'll have the total of all sales on it. You won't have to list out every item.

Keep in mind that what you can deduct will be based on your expenses during the same tax year. A 1099K is essentially self-employment income; it's "gig" work. Your tax obligation is based upon the combined income and expenses during the same tax year.

For example, in 2017 I bought a Gibson Tennessean for $1600. That would have gone towards my 2017 Schedule C as an expense, to offset any 1099 income I also had in 2017. If I sell the Tennessean in 2024 for $2900, then any taxes I have on that would be based on whatever expenses I also had in 2024. It's not about how I sold it in 2024 for $1300 more than I paid in 2017. It's about the $2900 income I have from a gear sale in 2024, minus whatever gear I bought in 2024. Unless you're dealing with capital gains/equity, depreciation, or something along those lines, you aren't going to be looking outside the tax year you're filing for.
 
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NowYou'rePlayingWithPower said:
Unless it's a business that's not correct. Any profit is taxable despite losses.



You will want that information on hand for the IRS if/when they ask for every single transaction including receipts. You will report the difference in totals between the 1099k and miscellaneous income form as a negative number. Say your 1099k form says $10k in gross sales and you profited a total of $100 from a few of them. Your miscellaneous income would be -$9,900.00 to offset and you would be responsible to pay taxes on the $100. You don't need to line item them except for your records when/if the IRS asks.
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I have documentation on every purchase, whether bought from Reverb, AMS, MF, etc. It's easily accessible. Just burns my ass that it's even necessary. This "bill" was to make the rich pay their fair share, and it's really only going after poor people like me. I'm hoping Trump gets wind of it, and how it really attacks the middle and maybe even lower class, for the most part.
 
napalmdeath said:
I have documentation on every purchase, whether bought from Reverb, AMS, MF, etc. It's easily accessible. Just burns my ass that it's even necessary. This "bill" was to make the rich pay their fair share, and it's really only going after poor people like me. I'm hoping Trump gets wind of it, and how it really attacks the middle and maybe even lower class, for the most part.
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You're a step ahead of a lot of people when it comes to paper trails, so if there's solace to be found in it, it would be that. Pain, yes absolutely.
I wouldn't stress it, just make sure to keep hard copies if you're solely relying on digital documents as those can disappear or be a pain to find in the future, imo. Just keep an eye out from the payment platforms too for a pse or a second 1099k so you can get those squared away under the 1099-misc form so you aren't taxed twice.
 
napalmdeath said:
I have documentation on every purchase, whether bought from Reverb, AMS, MF, etc. It's easily accessible. Just burns my ass that it's even necessary. This "bill" was to make the rich pay their fair share, and it's really only going after poor people like me. I'm hoping Trump gets wind of it, and how it really attacks the middle and maybe even lower class, for the most part.
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They need to re-assign those 87k new armed and trained IRS agents to the border.
 
NowYou'rePlayingWithPower said:
Unless it's a business that's not correct. Any profit is taxable despite losses.



You will want that information on hand for the IRS if/when they ask for every single transaction including receipts. You will report the difference in totals between the 1099k and miscellaneous income form as a negative number. Say your 1099k form says $10k in gross sales and you profited a total of $100 from a few of them. Your miscellaneous income would be -$9,900.00 to offset and you would be responsible to pay taxes on the $100. You don't need to line item them except for your records when/if the IRS asks.
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If they're forcing me to act like a business then I'm going to act like a business.
 
napalmdeath said:
I made ZERO profit on anything. Sad, but true.
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Then you’ll pay zero federal taxes on all of it. You call out your sale price and itemize out shipping costs, taxes on the sale, etc. that reduce your tax burden. You won’t get money from them for the sale price, minus deductions, for being below your purchase price so list what’s easiest to document to get below your purchase price and print everything for safe keeping.

The year I sold something and made a profit I found a hobby callout checkbox on a form that let me write off the costs associated with the sale. Because I still made a profit it was only like $40 in taxes I had to pay after. Not worth fighting the government over $40. It was and is by the book and correct - see if you can look into it. It’s been a few years so I don’t remember the form.
 
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