According to the IRS, Form 1099-K is used to report payments for the year from credit cards, debit cards and payment apps. Form 1099-K is created for sales on marketplaces such as eBay.
Generally, the IRS requires these forms to be sent out by January 31 of the following year. For example, eBay can be expected to provide Form 1099-K for 2024 to sellers by January 31, 2025. They will also send the 1099-K to the IRS.
You have to meet a threshold before a 1099-K is required. eBay will send you a 1099-K when your payments exceed $20,000 and you have more than 200 transactions for the year. The IRS has plans to ultimately lower the threshold for online marketplace sales to $600 in the near future.
For third-party platforms, such as PayPal, the threshold is lower. As of 2023, you may receive a 1099-K if your total payments exceed $600 in a calendar year, regardless of the number of transactions. This is a low bar and means that many more people will receive Form 1099-K.
eBay Will Not Mail Form 1099-K
If you are an eBay seller things will be different this year. It was recently announced that eBay will not automatically mail out Form 1099-K. Instead, sellers who wish to receive their 1099-K by mail will have to update their delivery preferences by December 31, 2024.
If you request Form 1099-K to be mailed but don’t receive it you can download a copy from eBay’s website.
Frequently Asked Questions
Will the 1099-K equal the exact amount of sales I made on eBay?
Not necessarily. For a variety of reasons your 1099-K might be a little more or less than the sales you show on your books.
I sold on eBay but no 1099-K is available. Why not?
You will not see a 1099-K if you did not meet the threshold for the year.
Do I have to pay tax on the amount shown on the 1099-K?
No, the 1099-K shows the gross amount of sales for the year. The typical eBay seller will have several expenses to deduct from the gross amount in order to determine their taxable income.
My transactions were not enough to reach the 1099-K threshold but I made sales on eBay. Do I still need to report the sales on my taxes?
Yes, even though you did not receive a 1099-K your eBay activity should be reported on your income tax return.
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